As someone who literally lives and breathes the early-stage world of startups as an angel investor, a mentor, and the director of entrepreneurship at Columbia University, I’ve had a front-row seat into a multitude of co-founder disputes over the years. In fact, I’m often the one called in to mediate—or, at least, the guy a lot of people call to whisper about their particular “situation” with “the other partner.”
I recently wrote about the importance of partnering only with the “right” people in your business. The reality is, though, that no matter how careful you are, tough situations are bound to arise between co-founders, and you need to know how to manage them.
It’s important to know that co-founder disputes come in all sizes and shapes, so let’s outline some of the various problems: the resolvable, borderline, and "it's over" cases.
Resolvable Co-Founder Disputes
- Work Product Concern: One partner feels as though the other isn’t putting in enough work and energy.
- Attitude Adjustment Needed: One partner feels that the other isn’t representing the company well enough in terms of attitude, treating people right, or any other reason.
- Unwelcome Surprise: One partner learns something about the other that he or she didn’t know, and and doesn’t like it.
- Marriage/Divorce/New Baby/Death in Family/Illness or Disability: One partner has a life-altering event and as such can’t focus as much on the business. This puts a huge strain on the other partner.
- Equity Remorse: One partner feels the other should have less equity than he or she has been given.
As long as you still trust your partner and you have open lines of communication, things are usually salvageable. The key is to get away from work (at night or on a weekend) and to have frequent and unhurried conversations with your partner over drinks or lunches and dinners. Do this weekly and talk through all situations in the spirit of openness. It’s amazing how infrequently co-founders do this, but it’s huge. Work can be immensely stressful and you need to get away from that environment into a relaxed and open setting. Continue to cultivate that great relationship you had once. When people feel acknowledged and respected, that is often the key to hearing the stuff that’s bothering them. You will make the most progress this way and you will understand each other better. You will often be surprised by what you hear and you’ll have a better point of view on what makes your partner tick. This will open channels to solving your issues.
One of the big surprises in these types of disputes is that the issue may have been a total misunderstanding, or that your partner was afraid to speak up about something relatively harmless. An open, trusting, non-judgmental environment with no one else around is the key to eliciting these kind of conversations.
Borderline Co-Founder Disputes
- Personality Clash: The partners’ personalities are just not clicking, the relationship has deteriorated, and working together has become a strain.
- Profound Disagreement: The partners have strong disagreement about the strategic direction of the company or another major decision and can’t seem to resolve these differences.
If you’ve tried meeting outside of work frequently and have been making an effort to have open discussions, but your partner is still being difficult to deal with and the relationship is suffering, you are at a real crisis point. At this stage, I recommend going to see a reputable startup coach in the city in which you live—the equivalent of couples therapy for startup founders. I know people who have gone through this and come out the other side much stronger as a team. Believe it or not, sometimes it takes a third party to help you through these types of impasses. If your business and your partnership is worth a great deal to you, this is a logical option and is worth putting in the time.
"It’s Over" Co-Founder Disputes
- Loss of Trust: The partners at some point lose trust in one another.
Unfortunately, sometimes someone violated a partner’s trust or the relationship deteriorates to such an extent that the partnership is over. This essentially means that your company is finished. You probably just partnered with the wrong person and that’s the end of it. Nothing can be done. Pick yourself up, take some time off, and get back in the saddle with the learnings you’ve gained from this experience.
Even if you're not currently having any problems with your partner, the best way to avoid them in the first place is to have frequent, regularly scheduled “off-sites.” This is a great way to examine where you are as a company and what you both could be doing better. These meetings establish a regular routine between the both of you that keeps the relationship well-oiled and builds and deepens trust, loyalty, and alignment over time. When big issues arise or the inevitable difference of opinion bubbles to the surface, you can talk through these in an atmosphere of respect and trust--knowing that you both have the best interests of the company and each other at heart.
Photos from top: Thinkstock, Shutterstock