Hopefully you got some decent key person insurance set up at the start. If not, whoops.
The next thing to do is to talk it out. Does he want out? If so, can you buy him out? If not, is it realistic that he can stick around? Is there anyone in your network you can bring in to replace him (temporarily, if he's got a good outlook)?
If he can't work in the business any more I suspect you should approach this in a fairly similar way to how you would if he just wanted to leave for any other reason, or wanted to take a large block of time away from the business. Being dispassionate about it, you have to accept that the fact it's cancer is actually largely irrelevant; that's just the catalyst for action. As far as the business is concerned it's the action itself that's important.
That person has just received some of the worst news of their lives, for no fault of their own. This is very relevant for approaching them with patience, kindness and care.
OP will need to reconcile their ambition and past expectations with being a decent human being and, possibly, a friend.
Cancer is bad, but without more details is imposible to know how bad it is. I've seen case in my family when they got a cancer, it was operated and got a minimal post treatment and lived happy ever after a few decades and counting, and other cases where it was too late and died like one year after the diagnosis. I had similar experiences with coworkers.
For example, in some prostate cancers the recomendation is to "do nothing", or to be more precice to wait and check them frecuently https://en.wikipedia.org/wiki/Active_surveillance_of_prostat... But in other cancers waiting is stupid and shoud be removed asap and get chemo and more.
Then, it's pretty obvious that you should take this as a problem that "hits the company", as in you should solidarly take the "loss" that his illness is causing the company. So he should be paid the same as if he was fit to work, and vest him like you are.
Other than that, be human.
Fwiw, I was close to dying before him a few weeks back in a medical emergency, something we both didn't see coming. In the end, fate can always find a way.
From a personal perspective things should be pretty clear, no? Understand that your cofounder suddenly has a very different perspective on life and must change his priorities immediately. If he is going through chemo or surgery there will be long stretches where he will not be able to support you or the company. He may or may not come back. He may not recover. Cancer sucks.
From a company perspective things should also be clear? This is exactly why you have clause upon clause in your contracts, notarized, lawyered and signed. Life happens. People die, have accidents, quit, become sick. If you are unsure about your legal obligations get a lawyer.
While I understand this sentiment - is that really how you create a successful business?
If you have a worker who just doesn't perform at all, no matter what you do, should you fire them? Would you want to be fired if the tables were reversed?
If you don't and you're pre-PMF though, I'd just shut down or pivot to something else if it doesn't make sense anymore. (I ran a YC startup and my cofounder split. I stuck with it for too long, and I got depressed working on the old thing alone when it still wasn't getting anywhere.)
(I really hope you're not seriously asking HN for advice on this. If this is a genuine request for advice, you have plenty of it now. Please go and be a compassionate human and support your co-founder. Consider deleting this post before they get to see it for themselves)
In germany and other europeon countries, their family would inherit his shares which can become a problem if those family members do not care about the company at all and just want out or nothing to do with it.
We talked to our partners and told them what we want them to do and they would become silent partners without control.
Nonetheless, this is actually independent of him having cancer.
When we set up vesting for ourselves, we just wanted a huge portion of something for super cheap and taxed beneficially if we made an 83b or 83i election, and we realized that the terms of vesting wasn’t regulated and we had unilateral discretion over everything. Our cost basis wasn’t zero, but we wound up having $200 grants with like 3 month vesting. We exercised immediately, mailed the election in, and then had paper value way higher super fast after sales at much higher prices, with a lot of liquidity.
I periodically reaffirmed with my cofounder what the purpose of our venture was
“We’re still in the money game, right?”
and this supports our financial engineering, as opposed to being steered or married to the particular idea or line of business
so all that’s to say, what game are you in? do you two have unilateral control over the contracts? maybe that steers the conversation more than wondering if they could or should make the cliff for some illiquid startup ownership
people need to use their imagination
I do remember Pipe being in vogue a while back around financing based on futures of subscription fees, but so far that's the only model I can think of that isn't debt with either a) its associated covenants or b) some kind of underwriting box piggybacking off of dilutive capital (venture debt)
2. If you're not already doing so, support your co-founder on a human level. They may well be frightened and uncertain. Be there for them.
3. Talk to a lawyer together when you're both ready and your co-founder has some clarity and headspace.
Listen actively: Let your co-founder vent and express their feelings freely without judgment. Sometimes just having a listening ear can be incredibly helpful.
Validate their emotions: A simple "That must be really tough" or "I can see why you'd be feeling this way" can go a long way.
Focus on what they can control: help them focus on what they can control moving forward. Maybe it's reaching out to a mentor/friend in your network who can help?
Just be there: Sometimes the best support is simply being there for them. Let them know you care and are there for them however they need you.
(You included some irrelevant details about stock and cliffs, but I can understand it's an emotional time and you may not be able to think coherently.)
In general, succession policy in companies keep the business running when individuals eventually leave. No one person's role should be so uniquely important that a firm will stop growing if they disappear.
In large firms: births, illness , and deaths are a daily occurrence.
In small firms, once the founders leave only a third of companies survive the next 2 years.
You may have your creditors target your firm as well, as the talent pool needed to reach a profit-mode may no longer be seen as viable.
Also, talking about other peoples health issues without consent may be a crime in your region (in my country it is a $93k fine per violation.)
There is no universal cure for cancer, but most of them can be starved out. Carbohydrates are fuel for cancer avoid them on all cost. Depending on the cancer, fasting and strong reduction of caloric intake. Some expert say, you should avoid autophagy, some say, 30-40 day fast can starve it out - depending on the type. GDF-11 seems to to have fixed some - needs to be precisely adjusted based on bio markers. There are some peptides to boost immune system. If he wants to eat, vegan and mostly greens, fibers and no processed foods.
As a biohacker, my suggestion: Vitamin D, K MH-7, Zinc, Se-Methyl L-Selenocysteine, Zone 2 Training, Stretching 2x day 15 minutes at least (immune-cells use fascia as roads - glued fascia layers are a breeding ground for cancer)
Cancer is not one disease. It's not a problem with too many carbs or not enough stretching. To simplify and mislead people like this trivializes a serious and potentially fatal condition.
https://scholar.google.de/scholar?hl=fi&as_sdt=0%2C5&q=cance...
Every fucking expert on sugar will tell you that this stuff is unhealty. I wrote multiple times, it depends on the cancer.
And I never said he should avoid regular treatment.
He was eating and acting wrongly and was in the wrong state of mind - last one I knew and tried multiple times to get out of it, but he did not listen.
Your company is just a job, just a company.
What would you expect of him if you'd be in his situation? I'm sure that having a successful company would be the last thing on the list (if it was there at all).
I'm not sure this is true anymore. Various cancers are curable (if metastasis has not occurred), and others have good long-term treatments available.
And if you mean "ending" in the long-term, then I'm afraid that is true for all of us.
So, what's the question anyway? How you want to go forward with the company? What your cofounder wants? What the workforce wants? What you want? Too many variables at the moment is my guess.
I would suggest a hardcore honest long personal talk with only your cofounder in how you both see things and what you want personally, for your workforce and for each other. Agree on things. Could both give you some peace.
And remember it's nice to try and follow Will Wheatons law.
The fact that you're asking this question on HN suggests not.
Edit: To add context, I assumed that you mean your cofounder was about to die and can no longer run the company. But now I realize that you didn't say that.
Step 2 - depends on wether he can and wants to stay involved.
Step 3 - go to step 1.
You have a choice, so please consider that most startups fail, and that disease, aging, and death are inevitable parts of life. The way you deal with these things have a very real and lasting impact on your own happiness and wellbeing.
Best wishes to you and your co-founder.
In all seriousness, do unto others as you would like them to do to you.