Ask HN: Has anyone quit their startup (VC-backed) over cofounder disagreements?

I did something similar. we had some financial issues and disagreement between cofounders. I left and the other cofounder bought back my shares.

What does the VC think? Do they agree with her or you?

Pivoting every few months? 0 cofounder alignment?

Decisions like these are tough to make in the moment, but looking back you almost never regret it. Trust your gut.

If you haven’t already, tell her you’re thinking of leaving and explain why. See if there is a way forward and if not move on as quickly as possible.

Pivoting every month! After 24 month and after raising VC money. That does not sound good. There are very few things that can be uncovered/learned in one month that would justify pivoting away from it, even in B2C. Even while throwing things at the wall and seeing what sticks, one needs to actually wait for the thing to actually hit the wall, at the very least...

Probably her or they wouldn’t be asking

Cofounder splits are extremely common. Cofounder "couples" counselors are a thing you could look into to help resolve your differences. Your VC might have recommendations for one. If you ultimately decide to split, I'd recommend at least one of you (or "the company"?) getting a lawyer to draw up a formal separation agreement you both sign in order to split in the cleanest possible way.

Run.

Pivot, means turning on an existing axis. If you were building "product M" and on the way built "L" and it turns out that it's more useful/profitable thats a pivot.

You're flailing around trying to make your VC some money. You clearly aren't happy with this.

Let's be candid, you could go found a micro startup every month for the next 12 months and one of them is likely to make enough to pay your own bills. You dont need to build a unicorn you need to build a small business... one that supports at least you.

Lots of founders go through this. You should have an honest conversation with your co-founder. Probably couples therapy. One option is to do it with another founder who has been there (me).

You both are going through a challenging time. Of-course you are going to find some things that are more interesting to you than your founder, and vice versa. Especially if you are pivoting every month (which is a whole different problem).

Going through tough times can build resentment, the way to get on the same page is to talk.

When you leave a startup like this, do you have to leave all your IP behind?

If you leave on bad terms and start another similar company, could a vindictive former partner come after you legally because they own your old work?

I used to work in VC and have seen a few examples of this. Every case is a little different, but from what you've described I'd focus on salvaging the co-founder relationship. Conflict like this is totally normal. IMO, a pivot is when you change directions based on new information. It sounds like you're not pivoting, but lost. If you haven't already, addressing this head-on and having a candid conversation about being lost would be beneficial. Think of it as an exercise to possibly strengthen your relationship via conflict. Few other thoughts:

1. At this early stage of the business, the core asset is really the co-founding team and their relationship. Conflict is very much normal, but how you resolve it is important. You should be able to articulate your co-founder's concerns. For ex. she might feel the pressure to show "progress" to your investors.

2. It takes a lot of time and energy to build a good working relationship. Moving onto something else might seem like a good idea at the moment, but you could be right back with the same issue with another co-founder.

3. If you do decide to move on, end the relationship as amicably as you can. Note that this is not necessarily the "quickest" route, but it'll help keep your reputation intact.

Edit: spelling.

First off, that sounds incredibly frustrating. I’ve seen this archetype before—a business person with just enough technical knowledge to chime in on complex product decisions, but without the patience or interest to develop any real depth. Instead of building real understanding, they rely on mimicking what looks successful. Always chasing whatever has funding or buzz.

That kind of thinking lacks vision and makes it really hard to build anything meaningful. Over time, it wears you down. Even if the product “works,” it doesn’t feel good because you know you're forcing it. These folks tend to say things like “this should be easy,” then only show up to question why something isn’t done. They manufacture urgency instead of clarity, and when things inevitably fall short, the blame falls on the technical team.

Second, you’re not a first-time founder anymore. Life’s short. For me at least, you’ve earned the right to walk away and build something you actually care about again.

> ideas only resonate if there are competitors who've raised $X million

Is there a tactful way to point out that this metric optimizes for niches that already have very successful competitors? Of course you can be a successful newcomer in an established niche, but that's probably not going to happen if you go into that field solely because someone else made money there.

Pivoting every month fishing for ideas in different industries? What in tarnation? Yea dude get outta there.

How you navigate this is you quit. You don't have a startup; you have an unstable pair of cofounders flailing to pick a startup to build. Every dollar you draw from your initial investment before securing product/market fit devalues your work. You and your partner have lost respect for each other and will likely sabotage any success you do find.

It's not clear to me what you're preserving by staying.

Mediation is what you do when there's something to lose from dissolving the enterprise. But that's not the case here! Why preserve the relationship at all?

Related:

Ask HN: Should I leave the company I co-founded?

https://news.ycombinator.com/item?id=43467071

I have been a similar situation before. Yes, walk away — and learn what you can.

There's one easy part of your situation, which is that your immediate next step is clear. I think it's clear because it sounds like the two of you have a fundamental disagreement about how to choose a direction. There's also a power imbalance if you've consistently been going along with pivots that you don't want to execute on. If you think you can resolve things, then maybe I'm wrong. I'm basing my advice on the fact that this is 24 months in — enough time for you to know how easy it'd be to get back to "we like working together and are on a path to success."

Now for the hard parts: * You want to act as professionally as possible in walking away. Communicate clearly, being fair to both yourself and the other people involved. I think it's easy to err to far on either side (either too defensive/passive "nice to yourself" or too deferential "nice to others"). * It can be tempting to think of this is as your cofounder's fault, but that's not constructive, and it's better to learn toward your future actions. For example, how could you have seen this problem earlier? My guess is that you were never "cofounder compatible," and this is a chance to get better at identifying that compatibility with others (useful for both startups and other jobs).

It's not a fun situation, and I hope things go well for you.

I thought this was satire before I looked it up. I mean, it makes sense but it's still so hard to believe.

> since then we pivoted away from it. we've roughly pivoted almost every month to something new. there is no longer any vision or clear problem we're trying to solve. each month is our team simply fishing for ideas in different industries and domains hoping to strike gold.

I've parted ways with cofounders in two of my five startups (they left, not me... I could afford a zero paycheck for a little while, they couldn't). In both cases we did better after the split. In both cases our original business idea didn't work out, and we were trying to stay alive. It felt like pivoting from idea to idea. Reality was it was just trying to sell and collect enough to make payroll in six weeks. So we went from whatever we were doing to custom dev shop... Survival mode sucks.

When got down to a single founder, it wasn't that one person was right or wrong about what the business could do. It was that the business could execute well enough (without cofounders fighting and second guessing) so it could survive, and eventually find something to productize.

Agree that these are extremely common but you don't hear about them when you're constantly reading TechCrunch.

I've seen almost 10 breakups from startup friends in the last year and have been through one myself. It's like dating — very few end up in marriage and most marriages end up in divorce. Except maybe worse, because people get married after knowing each other for just a few days, in order to apply to YC.

You don't really have a startup, you're back to searching for an idea to work on.

Your team is no longer productive.

100%. This is an opportunity to lead, not walk away. Maybe he still fails, but it's a valuable learning experience either way and a much better story to tell assuming he wants to found another company. Conversely, walking away in frustration will be a red flag for many investors.

Mr Stuck,

I went through this and have strong feelings about it. I think the most important answer is to a question you aren't asking.

*How to predict market demand for a new product.*

It sounds like neither you or your co-founder know how to do this, and that's the problem.

I don't have enough context to understand if the differences between you and your co-founder are unreconcilable, if they are, then maybe the answer is to move on, but if you mostly get along but are just struggling with an extremely uncomfortable and challenging situation, then here are some things to consider...

First off, learn about Nonviolent Communication. If both you and your co-founder are willing to adopt it, that should help you improve your collaboration.

Next, you probably need to cut your burn down to near-zero if you haven't already. Even if you have a decent amount of cash, if you and your co-founder still have enough control to make this decision, lay off everyone that isn't essential to servicing existing customers. If you have no customers, then cut everyone. Cut down to the smallest possible burn you can, to give you the most possible runway.

Then, address your complete lack of market research skills, either by committing wholeheartedly to learning how to do it yourselves, or by finding a third co-founder who is really good at it. What you need is someone who has a decent grasp of technology trends and value-overhang, and who is very good at doing market research interviews (customer discovery interviews), and thinking through lenses like Jobs to be Done Theory, Outcome Driven Innovation and Design Thinking. When I say market research I don't mean some proctor and gamble quant nerd, I mean a scrappy startup bloodhound. Not all "business people" are built the same, and it would be good for you to ramp up the resolution of your evaluations of people in these roles.

Then you need to come together to pick a group of people to focus on for AT LEAST 3 months. These need to be people you can access and talk to many of, and people who you have good reason to believe are all doing or trying to do very similar things. Read more about jobs to be done theory if you don't know what I mean. Here are some examples: (Startup founders, insurance brokers, nurses, teachers, parents raising two or more toddlers, robotics engineers, etc. - PICK ONE). Ideally you want to pick people who have money to spend themselves, have some authority or influence over how some money is spent, or whose work is important enough that making them more productive would be exciting to people who have influence. For example, elementary school teachers are probably not as attractive as a market as university professors, and private school elementary teachers are probably better than public school.

If your founder is sensitive about engaging in this process without certainty that you will find an opportunity that's big enough to justify the VC investment, then consider focusing on a group of people like described above with high economic leverage (e.g. fintech CEOs, data-center architects, etc.) ~ focus on a set of people doing similar things close to where the money is flowing fast.

Once you pick the group of people, you need to resist the urge to come up with any product ideas. Your next step isn't to ideate or innovate or whatever, its to go and empathize with the people. Get really fucking curious about what the people actually care about. Find a way to not want them to have specific wants. Read this again: Set yourself up to be curious about these people's actual wants, while not wanting them to have certain wants. It's way more fun to talk to people this way, you won't have the tension of "I hope they validate our idea", and they will enjoy talking to you because it will feel like therapy to them if you do it right. Ask things like "What's the most important thing to you that you are the least satisfied with?", and "What else?", "if you could wave a magic wand...?", ask follow up questions, "has anything changed about that recently? Is it getting worse? How does it work today? Why does it work that way? How important is that step?, etc.", make sure you understand all their answers. Listen actively. Stay curious. Empathize.

Consider reading The Mom Test.

You will be better off paying the targeted interviewees hundreds of dollars to spend an hour talking to you (2-3x their hourly salary), than spending that money on employees helping you flail around. If you can get their time for free, great! Once you start targeting a specific problem, it makes more sense to not pay for their time, since the chance of solving the problem can become the new motivation for speaking with you.

After you have talked to ~30 or so people like this, you are fairly likely to spot an opportunity (You have also started to develop a very valuable skill). What you are looking for is something that a decent segment (e.g. 30%+) of the sample consider the most important thing they are trying to get done that they are the least satisfied with, or at least in the top 3, and that you think you can make a huge impact on with some emerging tech. Whatever you do needs to genuinely seem 10x better from the customers perspective, because the new benefit has to be worth the risk of spending time and money on something unproven / doesn't exist yet. The best opportunities will come from when you can re-frame the problems they are struggling with and understand them better than any one of the people you interviewed, because you got some unique perspective from talking to many people. Just don't rush this, because it has to be grounded in the reality of their existing values.

After you gain the insight and have designed a new approach that you are highly confident at least a handful of the people will be excited about, go back to them and validate it. Ask the hard and scary questions (now with all that validation tension again), that they can and will pay money for it, or fight hard to get other people to pay for it, etc. If you did everything right up to this point, at least a handful of people will start pulling the product out of you.

When you reach this point, at least 90% of the problems you described will be gone and you will have new (slightly better) problems. This is startups. <3

If you can't bring yourself to do something at least close to what I described above, then you're probably better off moving on, since the odds of succeeding from your current situation by pure luck is near-zero. That said, I encourage you to take the courageous and responsible path if you have it in you, the world needs more of it, and you will grow a lot from it.

Sincerely, FloorEgg

And just because they raised doesn't mean they're in a successful niche, just that they convinced people to write a check to invest...

Counterpoint: unless there's an opportunity for the company to be a success --- which, 18 months into its seed investment, it does not appear to be --- nobody is going to care whether this person stayed on to the bitter end.

100% this. If you guys had significant traction with your startup then it might be worth it to work really hard to try to salvage the relationship.

But right now you're just wasting your life. The most valuable resource you burn through at a startup is your life. Startups are stressful, they wear you down, they're not great for your finances, and many of those are doubly so if you don't get along with your cofounder.

Just quit, you don't owe anyone your life. You are less likely to find traction with two cofounders with a bad working relationship, and if you do find traction you are less likely to be able capitalize on it.

Do you really need a lawyer here? Presumably the mechanics are pretty simple: you're vested halfway to your share (in what is probably going to be worthless equity), which is what you walk away with.

I ask this because I have on several occasions lawyered up (sometimes adversarially, sometimes just to keep my own ducks in a row) during separations and (if you're working with someone serious who is qualified to manage a founder separation) it's always expensive, but not always valuable.

I also ask this because this is the Nth "I'm splitting up from my startup" I've participated in, and I've noticed that for better or worse, this community has a bias towards dramatically satisfying resolutions, like ensuring for instance that each founder in a doomed startup receives precisely the allocation of company assets that they're entitled to. In the real world, the smart play is often just to walk away.

The ROI of investing another year or two of frustration and failure so a handful of investors might have a marginally better opinion of you is poor to say the least.

I won't shut up about this, because I don't think most people can understand viscerally how much more valuable their time is than almost any other consideration until they've spent a lot of it already. People here obsess about equity stakes, but almost never about opportunity cost, which is what's really killing most of them.

Also? Working your ass off to save a shitty business relationship has a psychic cost. You do not have an unlimited reservoir of relationship energy to spend. If you want to keep doing startups, you need to guard your morale reserves. Wringing yourself out here won't just mess up your current startup (which seems fucked enough already); it can mess up your next one too.

Sure I quit my co-founded company when I realised I was crashing due to being overworked. Funnily enough after 20 years away I've returned to the original small company and now run it.

Working through a really difficult situation like this could actually make their working relationship much stronger. To your point, even if they fail they'll learn from the experience, which will be useful for their next venture (either together or going separate ways).

Have a frank and open discussion about things. That may clear the air and right the relationship.

As for pivoting ….. Steve Blank says, "A startup is a temporary organization designed to search for a repeatable and scalable business model."

So yes you need to be trying to find what works. Maybe try to decide together what you work on and for how long. But you do need to be actively searching.

Pivoting before you raise is great. Pivoting after you raise is less great; if you're effectively starting from scratch (for a definition of "scratch" that includes "everything you could do if you just walked away and started a new company with a clean cap table"), it's costing you to be doing that with investors already signed on.

Let’s say you have a food truck. You cook, they find festivals to sell at. Every month you find yourself having to redo the menu because they think a different menu will fit a specific festival better.

Your truck ends up equipped with a very complex kitchen. You never manage to get good suppliers because you mostly buy once or twice. Your marketing? Good luck having a proper instagram page with an ever changing menu and no known constant locations.

You will have no repeat customers, no foodie photos driving others to the truck.

Etcetera, etcetera, etcetera.

What do you do if not quit this craziness and go work for a food truck that has it figured it out? Maybe even a restaurant that is not on wheels …

Anyway, take care.

you’ll be happier on the morning after you leave than you even remembered was possible

think about how to start and maintain a better founder dynamic for the next company more than trying to course correct what you already have

Nevertheless, without a repeatable business model, your task is still to search till you find one.

You are correct though, the money should come after it’s found.

He did say he had early traction I wonder what happened to that.

Yeah I figured.

As fzwang mentions, your co-founder relationship IS the business at this point. I'd talk to your co-founder 1:1 and really have some uncomfortable conversations. If you both feel like the relationship is not salvageable, amicably walk away without burning the professional bridge (someone might ask her how you are to work with). If your heart is not 100% in it (for whatever reason) I'd suggest walking away. The opportunity cost of dragging the dead weight of a business that you're not bought into (and that you aren't seeing success with) is simply too high - and can have real life consequences (finances, stresses, etc). There's nothing wrong with walking away - there's a reason the overwhelming majority of startups fail. And most tiny startups fail due to co-founder relationships - doesn't have anything to do with PMF or anything. Think about it over a weekend - have the tough conversation(s) - don't burn the bridge. Live to fight another day. The sun is still shining outside and the NBA is still rigged to always make sure the Lakers are relevant ;)

OP seems trapped between a rock and a hard place. Doesn't seem bought in, not having a good co-founder relationship (a recipe for failure). But walking away would be a HUGE red flag for his future. I don't envy OP's position.

This is very interesting to me. From this thread: https://news.ycombinator.com/item?id=43472971, I am wondering if there are anecdotal stories of how equity is being handled after a split.

On one hand, if the leaving co-founder retains all equity, it creates a sandbagging situation on a cap table that's no longer useful to the business. On the other hand, it feels right for the leaving co-founder to enjoy some upside for the years they put in.

I understand this feeling. I think you are a bit lost and need to find a common ground. It's a situation to lead and have straightforward and hard conversations with the cofounder before deciding anything.

This problem is what vesting is for.

It's really not a huge red flag. Co-founder breakups are incredibly common. In this case the company is also flailing and has been likely written off by their investors, so they're not going to care.

Something I've learned doing a startup and talking to a lot of other startup founders is that one of the biggest risks is sticking around for too long just because there's still money in the bank. Your most precious resource is time, and if it's pivot-hell for 18 months you're well into sunk-cost land.

Standard 4-year vesting doesn't work well for this situation. A founder leaving a worthless startup with 20% of the equity is a huge problem. The remaining founder will need that equity to offer outsize offers to senior (and eventually C-level) folks to replace them. And it's demoralizing for the remaining founder and team to be working extremely hard to make the company successful, while the departed founder reaps the rewards with no effort.

Opinions will differ here, but I think if you're leaving a pre-PMF startup you've created essentially no durable value, and should return nearly all of your equity.

I've heard of startups doing 10 year vesting for founders (with double trigger) to align this better.

I'm sympathetic. We tried to get 10 year vesting together at my last company. But 4/1 is industry standard, and my rebuttal is that partners just bake 4/1 expectations into their decisions. If the partnership is uncertain about a member 6 months in, and kicks the can down the road another 7 months, that's on the partnership, not the structure.

VCs don’t care as much about failure as you might think. They make investments expecting 90% failure and understand that timing and luck are big factors in success, so they are simply looking for people who they believe can lead through rocky stages and navigate difficulty. Assuming you want to continue to be a founder, bailing on the company you founded, even in the face of very frustrating conflict, reflects poorly.

Some additional personal observations that OP might find useful:

- Building a company is really emotional, as you already know. Most founders are under-skilled when they start, and are forced to learn quickly. As a result, you get a lot of scars along the way and the experience will test all of your insecurities. Learning how to resolve existential crises again and again is part of the package. And it gets worse. Wait until you have whole teams of smart opinionated people that you have to lead.

- It'll be good to revisit why you and your co-founder decided to start a company. You've both spent 2 years of your lives living in the trenches, so to speak. Someone decided you two were worth the risk. Why didn't your co-founder quit after the first idea failed? Why does she keep trying? I obviously don't have enough info to make any judgement calls, but I've seen situations where people make the wrong call because they've failed to truly appreciate the emotional baggage. For example, sometimes the first failure hits really hard and triggers all sorts of insecurities in a co-founder about not being good enough. And if their team starts questioning their judgement over and over without diffusing the insecurities, it just makes things worse.

- There are good and bad breakups. Good breakups are worth it for the emotional closure and the reputational upside. Bad breakups can create all sorts of fallout that will affect you in unexpected way (sometimes without you even knowing, ex. if the drama resurfaces during due-diligence). All the legal mechanics are also much smoother and drama-free when the breakup is on good terms.

- I am probably biased because these types of co-founder blowups are what keep investors up at night. Losing a technical co-founder is not only emotionally draining, but usually lethal for the investment. People problems are gnarly and take a lot of skill and precision to diffuse. If anything, use the crisis as a personal challenge to figure out how to resolve it on good terms.

If you don’t care about founding another startup then it doesn’t matter. If you do, than that handful of investors is how you land your next gig.

If he wants to found another company he will need to pitch to investors and will be thoroughly interrogated about his experience before they will consider giving him money, and it’s a lot harder to sell a backstory where you bailed on your last startup.

Want to work with me? I’m technical, working on an actual b2b platform for industry with a significant TAM.

I can do business, but I am having trouble finding a technical person I can trust to take over while I do sales and other things.

There's no guarantee they'll invest in his next startup, even if he stays until the bitter end.

It's also possible that over the next two years, either he or his coworker could damage their relationships with investors. Typically, messy blow-ups reflect far worse on founders than politely stepping away. It often goes better to simply say something like, "Hey, I'm sorry, but I don't think we're aligned anymore. This startup probably works best with just one captain at the helm, so for that reason, I'm out."

Most importantly, even if sticking around for another year or two meant the difference between guaranteed funding and none at all, I'd still choose the extra year or two over the funding. Founders usually earn half—or even a third—of what they would make elsewhere. That extra time essentially translates to a couple of years of self-funded startup runway, and I'd much rather have that flexibility than guaranteed funding with strings attached.

At the risk of an unpopular view, and the inevitable downvotes, I think it's worth stating the following;

If your business model is raising money from VCs then doing things VCs want is important to getting paid.

All businesses tailor their output to suit their customer. Your customer is VCs. So you need to tailor your output accordingly.

In this sense your business partner is not wrong. There's no point on working on things that excite you, if it doesn't excite them. That's a hobby.

Sure, pivoting too often is also wrong. So you should try to improve that.

At this point it's probably worth sitting down with your partner with the fundamental understanding she is right; You need to find something to attract the next investor. However you need to stick with it, success or fail. You've thrown a lot against the wall, now it's time to choose.

Of course you'll likely fail. Most businesses do. VC based businesses at an even higher rate because your customer base is so small. But even failure is OK because VCs are looking for founders, not successes.

Make no mistake; founding a startup is hard work. Not fun stuff. Not interesting stuff. Mostly it's just work.

Being a founder isn't about coding. It's about business. You need to bring more to the table than just coding. Just like your co-founder takes an interest in the technical side, so you need to take more than a passing interest in the business side.

In any business, sales is the most important thing. Without them you will fail. Tech supports sales, not the other way around.

I'm sorry that this sounds harsh. I don't mean it that way. I wish you success. That success starts with you realizing the truth at the heart of your partners position. Start there. Fix your relationship.

Good luck!

Move on, you’re not married. If You can’t align on how to vet the problem then you can’t align on the dozen other things you need alignment on. Cut your losses and move. It’s not failure it’s pivoting. Take the learning and move on, and make sure you vet your next cofounder throughly along what you learned from this experience. I will say, she wants to work on something that she has data she can sell. Selling, users, and traction will make the fundraise much easier. So try and see where she is coming from. But it sounds like at this point better to go your own way.

A backstory where he explains dispassionately that after repeatedly unsuccessfully pivoting into industries neither of them understood, he came to the conclusion his cofounder wasn't learning from these mistakes and he needed to take a different approach even if it meant starting again with nothing doesn't sound any harder to sell than a backstory where he explains the rationale behind pursuing four more pivots he didn't believe in before running out of money. Also sounds like a situation where his existing investors have probably written off the money and may even agree with his perspective on the pivots.

Bailing from a startup with significant traction or bailing when it's too early to tell could be much harder to explain away, but it doesn't sound like that's the problem here...

I would recommend getting your board involved. They can help you navigate this better.

This roughly describes the startup I'm working at now. All co-founders and management have quit, along with most of our regular staff. The rest of us are also looking for a way out.

It sounds like a grand vision is required. Come up with something you believe in and push it. If there is no traction leave and do it yourself.

Her methods of copying someone successful forces you to innovate the space which doesn't happen with quick pivots over pushing in one direction you believe in.