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?
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!
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.
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.
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.
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.
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!)
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.
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.
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.
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.
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 have decided to "quiet quit" and start hunting for something better. Who knows, something might change, but I doubt it.
I wouldn't recommend it but could be something to consider.
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 :-)
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?
As someone else said, if you're asking, you probably should leave.
If those goals aren’t met, agree in advance to regroup, reassess, and commit — together — to a new path forward.
My 2cents
You might even be able to rebuilt it with the extra cash and the ashes of their doom afterwards.....
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.