Assuming there's no pre-nup, what happens when a startup founder gets divorced? I'm guessing things vary state-by-state, but I'm curious if anyone has knowledge or experience in this arena.
Has it ever affected a high-profile/silicon valley startup?
Thanks.
I'm sure the answer largely depends on your business structure. For example, a corporation is a separate entity from your personal finances and there are really no owners, just shareholders. So in this case your wife may only be able to take shares.
If you don't have a corporation or haven't created any other the other business structure then any money you make is dealt with by a schedule C which makes you a sole proprietor. This money goes into the "marriage pot" and your wife would be able to hit this the same as the rest of your finances.
Best advice, talk to a lawyer and an accountant. ;)
When Fenwick put my incorporation paperwork together, I recall there being some sort of doc that assigned my equity to my wife in the event that I died or became otherwise incapacitated.
I would think that a divorce might result in ex-wife trying to get some of that equity but it may ultimately depend on your incorporation's policy and/or Board approval.