
No founders agreement.. what are my options? - MakeThingsWork
Hello,<p>I&#x27;ve been working on a startup for almost a year. Even though it was co-founders idea&#x2F;concept and some work had been done previously, product was dormant for years as co-founder couldn&#x27;t take it to the next level due to other obligations and lack of interest. We&#x27;ve known each other for few years and have worked on other failed concepts in the past.<p>A year ago, I insisted we pursue that product more seriously as I saw potential so we both rolled up our sleeves and worked on our free time for more than a year keeping our full time jobs. When we started, we verbally agreed to 50&#x2F;50 split. No founders agreement or vesting schedule. Just an LLC was formed which we both are members.<p>Long story short, product has now started to generate revenue (not a lot) and we have no employees. Recently, we really don&#x27;t have good working chemistry. We tend to get into pointless arguments about strategy, direction, features to develop and way things need to be done. Is this normal reality in a startup?<p>Most recently co-founder scrutinizes every bit of my work and points that it needs to be done differently. Recently as we have started making money, co-founder continues to highlight how important their contribution is to the company&#x27;s survival every now and then unsolicited and without their contribution the company wouldn&#x27;t be successful. We&#x27;re both responsible for building and selling, each of us are focused more on one than the other.<p>Both of us had no prior leadership experience and know nothing about management or leadership. Perhaps we don&#x27;t know how to deal with this new found success? What are my options now? Ask co-founder to sign founders agreement on terms verbally agreed upon? Probably wouldn&#x27;t agree and get suspicious. Lawyer up which may be counter productive due to cost&#x2F;benefit.<p>Not asking for legal advice but I&#x27;m hoping some of you had similar unfortunate experience and have some insight to share.<p>Thank you!
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brudgers
Random advice from the internet.

Sit down and discuss the future.

    
    
      1. Discuss the financial prospects of the company.
      2. Discuss future products/business lines
      3. Discuss each of your professional goals
      4. Discuss each of your personal goals
      5. Discuss how you can both help each other achieve those things.
      6. Decide if you want to try to work things out.
    

Pointing to a document would not solve the problem. At that point you're
already lawyering up and curtailing dialog and arguing over who gets what
share of the present rather than building a bigger future.

Starting to make money is a change and change is stressful and starting to
make money is an inflection point for the company and neither of you has
experience dealing with that. If the company is successful things will
continue to change and this is an opportunity to gain experience in dealing
with change _together_.

Good luck.

~~~
MakeThingsWork
Thanks for the feedback. We've tried somewhat close to #3, #4 and #5 before to
no avail. I often have to be an audience of unsolicited outbursts of co-
founders past and ongoing accomplishments. Here is an example, "I did X and it
resulted in Y which is very very important and amazing, what have you done?"
or "If I hadn't done that for the company we wouldn't be where we are now. You
should appreciate that more." along those lines in addition to constant
scrutiny on how things needs to be done exactly the way they want it (no other
way). We each have things to accomplish week over week and it's all tracked in
Jira and visible to both of us so there is no need for me to announce these
randomly.

I've have 10 years worth of professional experience at a big shop having
people work below and above me but I've never experience someone behave in
such a way or control every part of the business in a way it just ins't
necessary. Perhaps they no longer need my contribution and want to create such
atmosphere so I can walk away?

I'm embarrassed to be complaining about this on the internet rather than going
and talking about this to resolve conflicts like and adult like you said but
having tried multiple times it just isn't working out. Almost feels like the
way author describes his experience here
[https://techcrunch.com/2017/02/18/co-founder-
conflict/](https://techcrunch.com/2017/02/18/co-founder-conflict/)

I get your point that focusing on the bigger future is far better than
figuring out who gets to keep what. But what if you no longer enjoy each
others company and can't deal with the environment? I'm looking to move on but
don't want all the time and effort I've put in to go in vain either.

I'm thinking of notifying that I'm stepping down and come to terms regarding
equity that we both feel is fair? Perhaps, I can get compensated at an on
going basis if not lump sum? What if I'm told no to any equity or comp what
are the options that folks have used before?

Sorry for the rant and thanks in advance.

~~~
siegel
Well, if you are thinking of moving on and he won't offer you any
compensation, you probably have leverage. Did you actually sign anything
assigning the IP you created to the company? If not, you're in a good position
to demand compensation, as he'll lack clear title over the company's IP. Bad
position for him to be in.

~~~
brudgers
In my opinion, both people are in a bad position. The odds are that this is a
lose-lose.

~~~
siegel
I can't disagree with that. But there are ways to make the best of a less-
than-ideal situation.

I've seen many situations like this and I didn't want MakeThingsWork to feel
like he has no leverage here. He probably does. That will help if he wants to
negotiate a resolution.

