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

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.

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.

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.

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.

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).

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.

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.

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.

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!

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...

thanks for the advice here, fzwang. when these relationships end, what have you usually seen? have there been scenarios where the company/remaining funding is split between the founders? or is one usually bought out?

my cofounder has been pivoting across different ideas for the past 4 years now after their last company failed. while admirable, the inability to stick to idea/industry/persona, to me, seems like a massive red flag. we started the company for the sake of starting a company, ngl.

what does a good cofounder breakup look like?