When a co-founder dies
blog.ivylees.com
blog.ivylees.com
I went through the same thing. My co-founder was also in the "I'll give you a kidney" category. OP is right; something like this really puts things into perspective.
In my case, I decided not to continue for 2 reasons. First, there was too much work for one person (there was too much work for 2 people). But more importantly, I just didn't care anymore. I ended up taking a job and it was a quite a while before the passion returned.
Respect to OP for making the decision to continue. Greg is with you, even if in spirit only. Please succeed for those of us who didn't.
Talk to those who will listen: to friends, to family, to a counselor, to folks you meet at the electronics store. Do what you need to do for yourself, and give yourself time; don't be surprised if it takes longer than you think. Mourning cannot be pencilled into a time slot; it does not mesh with Google Calendar. Don't worry about startups and hacking if you find, at times, that the energy is not there; that energy will be back in its proper time.
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[Hackers: I see that mine is only the second comment. This is understandable, even laudable in many circumstances: The convention on HN is to speak only if you have something original to add.
That convention has its limits. There is nothing original to say when a friend or colleague dies; nearly every writer in human history has had their shot at the topic, as will most of us in our turn. But speak anyway. Use the standard words. What's important in mourning is the act of speaking, not what you say.]
With that said, I'm sorry.
Meanwhile, on a discursive note, here's my cautionary start-up anecdote on this subject ...
Some years ago, my wife was involved in a start-up -- a local microbrewery. She was the trainee brewer; two experienced brewers, Ian and David, were the muscle behind it. Ian and Karen worked back at the plant, pumping out beer: David drove the van, making deliveries to local pubs, collecting debts, keeping the business side running.
Now, microbreweries don't generally get VC backing. (They scale linearly with labour inputs, rather than exponentially, and they're paid after the product is drunk. It's a very 18th century business model.) In Fisherrow Brewery's case, it did what most small Scottish businesses do: it relied on a prearranged overdraft facility for its float (basically a line of credit from the bank).
This worked fine, and the brewery was growing, getting ready to hire more staff ... until David died. He was 40, he'd been working hundred hours weeks for a year, and he had a stroke one night.
The business was dead in the water six weeks later. What killed it was not Ian and Karen being unable to keep it going, but the bank; they called in the overdraft. "Why?" Asked Ian. "Because our experience shows that when one of the founders of a small business dies suddenly, 90% of the businesses go bankrupt within six months," said the bank manager. "But we're viable!" He protested. "Yes, but our statistics show that you're going to go bust, so we're pulling your line of credit."
The banks are in the business of risk management, and they know that when a founder dies, the business is going down the shitter. And so they flush, hard, to clear their own liabilities, even if it becomes a self-fulfilling prophecy.
(Here's the icing on the cake: the overdraft was secured against assets that David owned. To be precise, against shares in the bank in question valued at rather more than the overdraft!)
Another problem you might face is any relatives of Greg. With no corporates structure - or even one that just says 50:50 you may see wives/parents/cousins convinced that all startups are going to be ebay looking for their billions. Remember the saying: you only choose a spouse - you don't get to choose their family.
You may find you spend another few years working on your own to make this idea a success and then lose it all to the legal fees defending against multiple claims of who owns the other half.
It might be a good idea to make a break and restart the idea with just you.
That's not ethical. Whatever equity Greg had belongs to his estate.
Here's our solution, in case other people are interested:
In event of the death of a member (we're an LLC), that member's economic interests revert to their estate, but the inheritors lose all power to vote or make decisions.
Within 180 days, the surviving member can elect to buy out the deceased member's interest at a reasonable valuation. There's some legalese in determining "reasonable valuation", but the upshot is that the surviving members may take complete control of the company so long as the inheritors of the deceased are properly compensated.
If a buyout doesn't occur, then the inheritors of the estate become silent partners unless there's a mutual agreement to instate them as a full partner.
Despite what some people say, vesting is not always the answer. A lot of vesting mechanisms leave the door open for somebody to get screwed out of their rightful share. Personally, I'd rather see someone undeserving get rewarded, rather than see a deserving person get shafted.
One more thing: To Rex (the OP), my sincerest condolences. Losing a business partner is hard, losing a close friend is orders of magnitude harder. I think I can speak for the whole HN community in saying that you have our sympathy and understanding.
I just wanted to add a suggestion over the reasonable evaluation and the option to buy. In our startup, the company has taken life insurance on both founders and half of the insurance amount almost match a valuation we as founder agree on at the start of each year. This is mostly for the first year(s) where the company is not getting that much revenues.
So what happens if one of us dies is that their family will get half of the life insurance for their equity. The other half is to help the company cope with the fact one of us is gone. This may sound expensive, but in fact for guys in their thirties and in good shape it is quite cheap.
In my first company we arranged vesting over 4 years, 1/4 each year. Some people might prefer 3. Many investors will also insist on this as well.
True. But as cmos responded, this is why you vest equity. Ultimately, as macabre as it is, death is just an instance of the general case of a founder no longer contributing to the business.
If you need to bring in investment or new people and give them options who has to agree to that dilution?
If in a few years there is a row in the family about who owns your late partner's share - are you ready to spend time and money to defend in court what you said to who at the funeral?
Again my condolences for the OP's loss. BUT Startup founders need to consider that today they are co-owners with their best friend - tomorrow they may be working with their friend's newly divorced and bitter wife, their useless kids or a slimey lawyer who is preying on their grieving parents.
No it doesn't. If a person owns property (in this case, equity), that property passes to his estate when he dies.
If you both had an idea to 'do search' and had only got as far as picking a name. Then after another 10years of work by you alone you are ready to take on Google, does your late partner's partner get half?
And if someone has written most or all of the code for a startup and then he dies, do you think it's ethical to restart the company and act as if the guy never existed?
In the former situation (just a name picked), after a restart you need a new name.
In your situation (dead guy wrote lots of code), after a restart you have to throw away the code.
hell you'll most likely be blamed for the death during the trial. ex: you tinkered with the car in order to kill him, to get him out of the company
He had troubles throughout his life - he was a recovering alcoholic of several years at that point, had been through a difficult divorce, was struggling to pay his bills. (He was an excellent carpenter; we still have many improvements on our family's house that he built through the years.) But he was very well read, and had much life experience, and I can remember staying up late into the night when I was in my very late teens; talking with him, and broadening my perspective on life and everything else.
I wasn't so close with him that it had near the same effect, but I can recall the feeling of loss I had when it finally sunk in that there would be no more conversations late into the night in our living room, and imagining that feeling multiplied by interacting with someone as closely as such a co-founder is almost unbearable.
My condolences for your loss.
My partner and I recently thought about this scenario for us and decided that one way to ensure business continuity is to have a key man insurance for each other. We took out the policies a little while ago on top of other insurances.
When everyone comes together in a wake and pledges to go on AND to help each other, then moving forward is a powerful, bonding, and relationship building exercise that your lost friend would be proud of.
My condolences as well, you are a gifted blogger and I do hope you are able to continue.
It's rumored that this was something Gates and Co nearly had to deal with:
http://www.pbs.org/cringely/pulpit/2006/pulpit_20060330_0008...
It would be great if there was a fair way for all living parties to deal with this issue.
Good luck to you and may Greg rest in peace…
You don't want to forget, and you shouldn't forget, someone as close as that. You will, however, learn to go on. You'll become accustomed to having the memories, you'll get used to it, and move forward.
Even though I don't know you - thank you for sharing, and my thoughts and best wishes are with you.
If I were you, I would name something on your business after him.
I"m truly sorry for your loss. You do seem to be dealing with it as healthy as possible at the moment.
Peace.
Condolences, now go and make him proud.
My condolences.