Ask HN: Should I leave the company I co-founded?
Longtime HackerNews user, but for obvious reasons doing from a throwaway account.
I'm at a difficult crossroads and looking for outside perspective.
I co-founded a company that’s now doing millions in revenue (with potential for a high 8 figure to low 9 figure exit). We’ve raised very little outside capital and there’s no independent board — it’s just me and my co-founder at the top.
The challenge is: my co-founder and I are now headed in completely different directions. They’ve taken increasing control over key decisions and are steering the company in a direction I fundamentally disagree with. I’ve tried to influence things, but it's become clear that I no longer have real say in where this is going.
Worse, I genuinely believe the path we’re on will run the company into the ground.
I’ve been considering walking away and selling my stake — even at a discount — because if things don’t change, I think we’re going to fail anyway. But it’s incredibly painful to think about leaving something I helped build.
Has anyone faced something like this? How do you decide when it’s time to walk away — even if it means taking a hit — versus staying and continuing to fight for a different outcome?
If you are asking, then the answer is: likely.
There is a lot of nuance though, so I recommend finding a trustworthy third party to talk it out with.
All the questions and answers to discover the contours of your situation can easily be enough to identify you, which I assume you do not want at this stage.
Things to consider, but not answer here:
- the relationship with your cofounders: how many, how do votes work, etc. What did you decide in your founders agreement? Is the relationship antagonistic? Have you lost respect for them or they in you?
- relationship with your investors. Who has face time with them? What say or vote do they have? How are their interests aligned with yours vs your co-founder(s)?
- relationship with the employees. Who do they look up to and respect? Will they follow you on to your next thing?
- relationship with your customers. Do they know and interface with you or someone else?
- your skillset. Are you the technologist that invented something the the company was founded on? Do you generate all the sales? Have you created a great team that can now survive without you?
Take some time and try and live in the other side's perspective. You are moving in a different direction than they are. Do they find that painful? Will losing you be more or less painful than keeping you? Short term? Long term? What timing is at play (could be funding round, or something else)?
Best of luck!
The critical thing here is your shareholder agreement contract. What is in it? What are the rules about founders leaving?
It's kind of pointless for anyone to say anything without knowing what's in your contract.
Do YOU know what is in your shareholders agreement, what to expect legally- have you read it? If you don't then you're likely in a world of problems.
If you do not have a shareholders agreement that clearly sets out how to handle founder breakup situation then you might consider calling a lawyer as your next step and go watch The Social Network movie.
If you can’t spot the Eduardo Saverin in your company in under an hour then you are the Eduardo Saverin.
correcto
Yes, I have.
I don't know how old you are, but I know how old I am, and something I have learned at great cost is that the most precious thing you have is your time. Generally, if you have to ask whether you should take steps or make sacrifices to protect your time (or, almost equivalently, your future opportunities), you already know the answer.
Unless a large percentage (and a large amount) of your net worth is tied up in said failing company.
In that case, it might be worth the time to do what you can to uphold the value of your stock until you can figure out how to sell it or turn the company around.
Right, but then you don't have to ask.
Thank you for commenting here. Your opinion weighs a lot for many of us.
Let me play the devil's advocate. How do you know that you are right and they are wrong. All along you both were on the same page and you are successful. May be they are right. But, in any case, it all depends on the contract you have. Legally binding crap takes precedence. The next best option is to to sell, may be 60 or 75% stake to the other co-founder. They have the right of first refusal rather than selling it to your competitor. In any case, be very friendly. If and when it goes south, they may need you to right the ship. As always, you are the best judge of the situation.
A little late to the discussion, but what I missed in the comments was to properly try to reestablish the relation with your co-founder at least once more.
It sounds like it will take a lot more than a meeting. The two of you should go on a three day retreat to discuss the company situation and strategy deeply and to repair the connection between you two.
If you have completely different views, in a way that is really interesting and you should both strive to fully understand and learn from each other.
Who knows what lies underneath the difference in views?
Once you know that you can make a much more informed decision and if you still leave it will likely be on much better terms.
In the conversations I had with my cofounder about possibly going our separate ways he threatened to kill me, which really made it easier to know what to do and would have made the rest of a retreat awkward.
This is very serious. Death threats are not normal, moral, or legal. Protect yourself.
I suspect you have no problems making a call on a technical solution that you understand right? Because once you understand the system well enough, the answer is obvious such that the question feels like a given. Well obviously you would just...
But you can't make a decision here? So the question really is less; How do you know when it's time to walk away. And I assume it's much closer to; How do I decide what I want to optimize for?
If you're already completely sure you know exactly what you want to optimize for, then I'm gonna assert you already know the correct decision, and you're either avoiding it because it'll be uncomfortable, or you're already mourning it.
As for what to optimize for... I'm one of last people come to for advice... but that's never stopped me from giving it: No one ever wishes they spent more time worrying, no one ever wishes they worked more hours in the office. People do regret throwing more time at something they already thought was a waste of time.
(edit: ggoo said this already, and I'm shameful copying the idea from him, because it's too important to ignore. People regret giving up their principles because of some external expectation. Don't forget to consider the things that you consider important for their own worth!)
The even greater mistake is compromising your health and/or sanity for the sake of sticking to some principle. Bending to perceived external expectations is the fast track to destroying your soul from within.
I’ve seen cofounder departures go down a few times second hand/tangentially.
Not a single company survived afterwards.
Are you the CEO? If so, gain the buy-in from your cofounder to follow your direction. If not, find a way to get onboard… or probably damage the company with a departure.
Unless you can start acting on a working plan to rescue it you should get out.
Do it now before things get worse between the two of you. Make sure to get good lawyers and get cash or cash equivalents, otherwise you are very likely to get washed out along the way.
I've been in a similar situation and I eventually walked away to keep my sanity.
However, that being said, there are some simple heuristics you can try first:
- if you have more power via your shareholder agreement, you can prevent your co-founder from running the company, effectively firing them,
- if it's a 50/50 or they have more power, you can try to "disagree and commit" for a certain limited amount of time (e.g. 1 year) to see if what you "genuinely believe" is correct, or maybe they are more correct,
In any case, my advice would be to avoid an emotional decision.
As others have already mentioned, the post is a bit vague on details. However, what is your role? Are you the CEO or the CTO? Why is your cofounder able to steer the company? Higher stakes? Your silence? Extrovert/introvert issues? Did you happen to detail your cofounder why their chosen path is not good for the company? Do you have a structure in place to resolve cofounder conflicts? Do you still have your heart at that place? How do you know you are not mistaken/your cofounder is heading in a wrong direction?
I work in finance. One of my clients is looking to raise their first big round of capital, at a really nice valuation, with a product that might likely take them to >$1b in revenue. Anyway, the original founders had differentiated opinions also in terms of the product offering, so one of the founders was bought out a few years ago for mid 7 figures or something like that. I predict that their decision to leave the company due to disagreement on strategy will probably cost this person a high 8 figure payday (best case scenario) or perhaps a 9 figure payday (worst case scenario). Just wanted to provide this anecdote as one possibility of what could happen. It’s not an easy decision but ultimately you should do what you think feels right, but don’t bee overly myopic in your decision making. Also, don’t think that the only options are stay (don’t sell any equity) or leave (sell 100% of equity), you can fall somewhere in between and have some skin in the game for potential upside.
Try and work it out. Walking away is the easy path and always there. See if there is someone you both respect who can mediate the disagreement. See if you can timebox the other partners idea to see if it will pan out. See if you are both willing to listen to the data to point you both toward the right direction. If you have that much money coming in already and the market is big enough, see if you can get to profitability and at least be default alive so that you can sustain these endeavors in the long run in case the other guys idea doesn’t pan out.
> How do you decide when it’s time to walk away — even if it means taking a hit
If the co-founder is not sharing the toys anymore and is in the process of breaking them, then are you really taking a hit by leaving? If you stay without finding a way to gain back some play time (control), you still aren't going to play with the toys anymore and won't be taking any home with you because now they're broken.
What do you gain from watching the co-founder break all the shared toys? You can grab as many of the toys that you can carry and make a run for it, or sit around watching the co-founder break them all. The other option is find a way re-insert yourself into the shared play space. But only you can know what you are willing and wanting to do and my advice is to figure that out, and go all in on what you decided is right for you.
Ultimately you can't know what is the right path, but it is natural you are convinced yours is correct.
If you are not in the majority opinion and are blocking progress then I think it falls to you morally to get out of their way and allow them a chance.
It seems you can't agree to go along so for your own health you need to disassociate and leave.
If you think you can deal with being a passive investor you don't have to sell your shares. Don't do anything hasty - don't sell at a loss or to people that other shareholders wouldn't want. Try to exit amicably as if they have majority shares can use dilution to wreck your shareholding to worthless.
>But it’s incredibly painful to think about leaving something I helped build.
You would always be leaving at some point.
I am working through something like this right now. Rev growth is starting to slow, our headcount is growing too quickly, and the current CEO seems hyper focused on a raise but doesn't understand the current funding market (or how poor our financials look).
I have decided to "quiet quit" and start hunting for something better. Who knows, something might change, but I doubt it.
Another option to consider is splitting the company into two, each having a minority stake in the other and a cross-licencing agreement on the tech and letting each go in different directions.
I wouldn't recommend it but could be something to consider.
It's time to walk away. You are no longer enjoying it and could leave with a fat paycheck.
If they will run the company to the ground, you'll end up with nothing and waste your time. It's better to have something than nothing.
If you are afraid of leaving, and then later seeing your cofounder be successful, because perhaps you were wrong on your take that it is running the company to the ground... you could negotiate to keep a small stake at the company.
I wouldn't though. In the end, money is what matters in business. You can find another purpose or another idea worth pursuing.
When you do, message me :-)
Haven't you been communicating? Can you understand why your co-founder is choosing the current (new?) path? You don't need to agree, but you do need to understand what premises are leading to the decisions. Is your co-founder even aware of your disagreement?
How much equity do you have? How much equity do the outside investors hold? Are the outside investors supporting your co-founder's direction? Are you the tech guy and your co-founder the biz guy?
If your co-founder is so confident in the proposed direction, is he willing to buy you out? If not, why not? What about the outside investors?
It's time to walk away when you hit your peak. Too many startups ride things into the dirt because of a high peak. If you foresee things going down hill because of a new direction you are against, cash out before others realize.
Only you can really answer this. One thing I know, you won’t regret trusting your gut and sticking to your principles, even if they’re the “wrong” choice.
Hard to give good answers without knowing real details. I think reading conflicting perspectives from HN based on guesses and biases we apply to what you wrote will likely be frustrating for you as well. Feel free to contact directly using contact info in profile. Can redirect you to a good coach as well if that is appropriate.
I was in a similar place, I did leave, got completely shafted with my stock ownership (I didn't get a penny out of it) and still I have not regretted it once. In fact, my life and mental health has been improving at a steady rate since the lowest low when I wrote my resignation letter.
As someone else said, if you're asking, you probably should leave.
A co-founder is like a spouse — you need to adjust trust to make it work. If you find yourselves disagreeing on direction, here is one approach: if you can’t convince them, offer to fully support their idea for a set period of time with clear milestones.
If those goals aren’t met, agree in advance to regroup, reassess, and commit — together — to a new path forward.
There's not enough information in your post to really help. I'm happy to talk you through it, I have enough experience to offer useful advice. Email in the profile, I'll keep convo anonymous of course.
Seems like a no-brainer. If you believe that in a short while your interest in this company will be worth nothing, yet you can cash-in now, what's the question?
If you guys aren't fighting with each other for the best path during times of disagreement, then its too early to be talking about an exit.
My 2cents
assuming approx 50/50 cap table and revenue is recurring, millions in ARR is too much to be ignored, get a therapist to deal with your feelings and figure out how to work together, this costs $12k/yr plus the cost of being an adult. ARR goes up by default, millions in ARR does not just go to zero overnight
yes. Take the money and watch them crash&burn from a safe distance.
You might even be able to rebuilt it with the extra cash and the ashes of their doom afterwards.....
Bluntly, if you have to ask on hacker news, you are not equipped to handle this situation and should look to either exit or enlist more capable help. Your quandary is so contingent on the specifics of you, your cofounder, and the competing directions of the company that no good advice regarding a direct action to take is possible here. That you would ask in this forum is a very bad sign that either communications have broken down or you have not attempted a conciliation.
are you guys nuts, who's the ceo who should be calling the shots?
I would get out of the investment at the best possible price. Imagine you think your shares are worth $5 million right now, but you could only get out at $3 million. If you were not invested in this company, would you take $3 million cash right now and buy into half the company at a deep discount? If you really think there might be an 8 or 9 figure exit in the future, sell 90% of your investment and keep 10% as an option. Staying invested with shares heading to zero makes no sense to me.
If you think the business is going to fail if you stay, then any exit is not at a discount.
versus staying and continuing to fight for a different outcome
If staying is a fight, a bad outcome is more likely. Fighting is a poor use of staff energy.
Anyway, the fact that this is not a conversation with your cofounder probably means it is time for a divorce. Good luck.
Yes