How To Deal With A Co-founder Leaving Startup: An Expert's PoV

 Startup

Learn about the different ways a co-founder’s exit can affect your company and how you can tactically solve them from our COO.

When multiple individuals come together to create a startup from scratch, they see a collective dream, a dream of scaling together and creating their own signature in the market.

But the twists and turns in life might cause a rift between the founders and lead to a fallout. The reasons may vary, but how the rest of the people handle this ‘crippling’ situation will be crucial to the startup's survival.

At any stage of a business, this situation can affect the normal flow of the company and may cause many internal and external disputes if not properly dealt with.

Over the years we have seen many faces of founders leaving companies, and we would like to share what we have learnt through this blog.

Let's jump right in.

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Table of Contents

8 Reasons Why Co-founders Leave

Three Stages of Co-founder Exit Strategy

8 Reasons Why Co-founders Leave

reason cofounders leave

Co-founders leaving startups is not an uncommon phenomenon in the tech world. Ever heard of Ronald Wayne? He was a co-founder of Apple who exited the company in its early stages.

He got a whopping $800 as a payoff.

This is a classic example of a co-captain jumping ship; in most cases, the reason may be justifiable for personal or professional reasons. At the end of the day, they are human beings; we have to take time to understand the reason first. But most of the time, conflict of interest will be the reason rather than unavoidable obligations.

1. Personal Reasons

There are many personal reasons that can affect a person's productivity. Like a disease or something. When the co-founder believes that he cannot contribute to the company's development, they will choose to resign or refrain from the co-founder role.

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Many retire after making a sizeable savings for their future and tend to enjoy the rest of their lives rather than succumb to the pressure of running a company. These are just some of the personal reasons on top of my head; there can be many variations for this.

2. Co-founder not scaling with the company

A startup won't remain a small company for long; as the company grows, the  responsibilities of a founder will also grow. A founder should be a person who can be adopted to this change and have the skillset to lead from the front.

In most cases, the title of the co-founder is given to anyone who was with the company during its start. So when the company increases in size, they have to provide value to the company, or they will become underqualified to handle the responsibilities of a co-founder.

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Also Read: 9 Top Team Management Skills That Make You a Great Leader

There are two ways to tackle this conflict of interest:

One is solely based on how you choose your co-founder. Never choose a co-founder for the present requirements but as a future partner. So that their skills would be an essential part of your startup even after you scale.

Two, you need to have the “talk” with your co-founder at the time of inquisition about the possible scenario of a more experienced candidate occupying his position.

This might be an uncomfortable topic to talk about, but this move might save a lot of hassle in the future.

If you are unable to come to a resolution and the person does not choose to leave voluntarily, the termination process will be messy.

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3.  Burnout

Burnout comes into play when there is an imbalance in work allocation. Here one co-founder plays way too many roles in the company. This pulling of others' weight will exhaust them completely. Most of the time, a conversation might solve this, but due to the awkwardness of the situation, most refrain from it and later cause friction in their professional relations.

Later on, the co-founder burns out and leaves the startup. Like in any relationship, communication is key, and this takes predominance in a business. The risks you take, the hours you spend, everything needs to be shared, and a transparent line of communication needs to be maintained.