Ask HN: Can you fire a cofounder? | Hacker News Reader

Ask HN: Can you fire a cofounder?

12 pointsdear18 comments

A hypothetical situation: A cofounder has not put in much effort not doing much work other than showing up in meetings. But he is not "quitting", meaning he is hanging onto the shares he already owned and is going to own (vest) in the future. So you, the other founder, is effectively working for him. How do you handle this situation?

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Talk and stop it immediately. If cofounder does nothing and you say that you will stop doing any work under these circumstances nothing will be done and this is not good for co-founder's shares. Stop it immediately. Once money, fame and press is involved it's getting much worse.

Why isn't your cofounder interested in working on the project?

What would it take to get the cofounder interested?

Can you realistically discuss these issues without finger pointing and blame?

Could you move on to something else with equal potential?

What is the company worth, realistically, as a going concern, not in terms of what you have invested in it?

If the personal relationship is broken beyond the point which it can be readily repaired, why would you want to move forward?

Good Luck.

I am pretty sure he is interested in the startup. But he has a day time job and is unlikely to quit until seeing traction. He has his off hour activities, mainly related to his day time job. The time he can put into this is minimal. No personal relationship issue as of now.

What do you believe he should be doing?

Contract law is your friend. You claim that he breached an agreement (even if it was not signed). if indeed you are correct, there are pretty much 2 remedies: 1. make him fulfill his obligations (either by speaking to him or getting an attorney) 2. demand to renegotiate the agreement, or even breach it yourself. for example, he should have less equity because he did not invest enough.

explaining this legal situation to him will probably make actually going to an attorney unnecessary

Be honest and talk to your cofounder. If you both are. 50/50 and things aren't working out, you have two options:

First, try to negotiate a termination of service with your cofounder (talk to an attorney about this).

Second, quit yourself (but again, be honest as to why) and move onto something else.

The above assumes you guys haven't already launched and received traction. While the two options remain, it gets much more complicated to decide if you are launched with traction.

I had an experience like this. I waited it out, kept giving him tasks to complete, more chances, etc. One day he just decided to get a day job. My guess is that if they're not doing anything towards the advancement of the company, they're going to get bored and just walk away. Hopefully in your case this is before the shares vest.

Someone can be quite interested in the venture (and thus joined as a cofounder) but at the same time be pretty lazy, or busy on their other things. In this case, they are unlikely to "quit". They will show up in meetings and talk, but between meetings nothing much will be done.

From your other comments, the biggest question is what is the equity split?

You should tell him that you need more help, and he needs to give up equity so you have something to offer to someone else that actually has time to assist you.

Options:

1. Offer a buyout (perhaps a buyout of your stake).

2. Resign and start your own company.

3. Document failure to perform. Consult an attorney.

4. Grin and bear it.

5. (not listed here)

5. Talk to your cofounder honestly

It's amazing how much people don't like to talk to one another about things.

With 4, you just end up getting pissed off and exploding later. 2 and 3 burn bridges, 1 could be conveyed as wanting to take another path if you sell or potentially greedy (he sells)

Many people don't like to talk about uncomfortable subjects, and the reason is simple: they have a pretty good idea what the result will be (not pretty).

The other partner has leverage, be it legal, financial, or emotional, and when you're dealing with someone with leverage over you, you need to consult every last option before you even think about bringing things up. I think the OP's right to consider his non-conversational options.

Well, the OP is only presenting his point of view, maybe the cofounder will think differently and a honest conversation can help clear things out. And if not, the four other options remain.

My situation is not that bad yet, therefore the "hypothetical". I hope it would never get to that point. But I want to see if there is any protection just in case.

Did you sign any agreements?

Can you be more specific? What can you put in agreement that can be helpful in this situation?

The vesting mechanism only helps if one quits, but not in the case where the cofounder does not quit by himself, or not quit early enough. So I also want to know the answer to your question!

Nothing formal yet. Just verbal and email.

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