

Ask HN: How to exit as a co-founder? - jamescraig

In the last 2 years I have been working at a startup which I co-founded. The company consists of 2 other guys, me and a business angel. Everybody put some money in, with the business angel the most. From the very beginning, the atmosphere in the group was often tense and there were discussions/arguments. I got more and more frustrated and lost my motivation. Now, I am at a point where I realize that I should quit: I feel bad and demotivated most of the time... it's not like my sanity is at stake, but I have to change something. I want to work somewhere else/do my own project, where I can contribute in a better way.<p>Problem is: Our site launched about half a year ago and it's not going too well. On the other hand, we have planned a big promotional "campaign" for the next 2-3 months. Past performance of our other activities indicates that we should gain at least enough users to survive as a company, maybe more... and with a small chance the site will really take off. If it doesn't work, then the company is dead in 7 months (more or less). So, the next 2-4 months are a critical stage.<p>I talked to the team with the following proposal: I leave and give them a (probably significant) part of my shares in the company. I am allowed to keep some shares because of the work that I have contributed in the last 20+ months.<p>Their side: They feel that I am letting them down in the worst moment (which is understandable). They also feel that my work and my productivity could have been better, which I don't deny. Therefore, they would let me go if I give away all of my shares. For them, being a shareholder is tied to being a part of the team. If I stop being part of the team, I cannot have shares anymore.<p>I feel that there should be at least some compensation for the work that I did (even if it could have been better/more productive). They cannot compensate me now, because the company's finances don't allow that. But even if I give away all my shares... I would like to get at least a small (percentaged) bonus if the company really takes off.<p>What do you think:<p>1) Keeping a percentual share/bonus... is that greedy/unrealistic of me? (given the current problematic stage of the company) How would you see the situation if you were part of the team and I left?<p>2) What do you suggest I should do? (I don't want to do behave like a jerk towards the rest of the team... one of them is a good friend)<p>For explanation:<p>a) They cannot simply fire me/take away my shares. I cannot leave without their consent either. So, we have to find an agreement. If I stayed after openly talking about leaving, it would be very uncomfortable for everybody.<p>b) There is an especially strong conflict with the 3rd guy. He feels that I don't deserve ANYTHING if I leave... if I get the rest of the team to a more favorable agreement, the 3rd guy might bring the whole project down!!<p>c) anonymous post for obvious reasons
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tjic
This makes no sense to me:

> I cannot leave without their consent either

What does that mean? Have you signed something saying that you can not quit?

Regardless, the correct framework to think about this is BATNA

[http://en.wikipedia.org/wiki/Best_alternative_to_a_negotiate...](http://en.wikipedia.org/wiki/Best_alternative_to_a_negotiated_agreement)

If you can't get the deal you want, and you're forced to abide by what you've
already signed, what do you give and what do you get? It sounds like either
(i) you work for 1 year and get 1/4 of the company, or (ii) you walk away
today with 1/4 of the company, but no ability to sell the shares.

(We need more data on what that means - are sales of the shares restricted
until a certain date? Forever? What?)

You are absolutely (both legally and ethically) entitled to some sort of
compensation for your work. If you've already got shares, the company can't
take them back (unless you've signed a repurchase agreement). The company can,
both legally and ethically, dilute you afterwards. They can't issue everyone
else 1 million shares each, thus diluting you to 0.00001%, but they can pay
each person 2,000 shares per month, in lieu of salary. Over time, you'll end
up with a smaller percent ... but that's fair. If they work for no salary for
an additional year, they SHOULD have more stock.

It's really hard to say more without knowing exactly what you've signed.

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brk
How are your shares granted/allocated? Do you have a vesting schedule? Are
they "yours" or the "companies"?

It seems that there is a legal answer here, as well as a philosophical answer.

Figure out who really owns the shares and what you are legally entitled to,
and then process your decision.

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jamescraig
The shares are already mine, but I have to work there for one more year before
I can sell. A year that I'd like to avoid. So, legally, I am asking for an
option that is not part of the contract yet... therefore I need their consent
in the decision.

~~~
brk
Sell them to who? Back to the company?

~~~
jamescraig
Back to the company or any willing buyer. Of course, my shares are only worth
something if the company does alright or better.

~~~
brk
How much are the shares likely to be worth in a year?

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noodle
why not try and ride out this campaign to see where things go. whats another
2ish months?

then if the direction doesn't change, tell them that you can't keep going and
want to quit. if you explain politely that you feel you should be compensated
for your work, they'll hopefully understand.

if not, let them know that it really comes down to two options -- either
you're quitting with a cut, or you're not quitting but you'll be keeping all
your shares and just not doing any work anymore.

