

Letting go of CoFounders - asurias

To give a background, I am working on startup for the past 6 months full time. Within the last 4 months, we I have assembled a team of 4 more people as co-founders except all of them are working part-time. We had divided up the founders pie in the order of 40-15-15-15.<p>One of the team members were working a lot at the beginning, but lately have been performing extremely poorly and outputting very bad quality, and this is becoming a big problem for the rest of the team.<p>How can we let go of a team member, and how would compensation work (since letting him leave with 15% ownership is not fair for the current team, and letting him leave with 0% is not fair for his contributions).<p>How does this work? Any experience with such situations? This is a really nasty situation, please help.
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pedalpete
First of all, I'm assuming that you've already discussed the issue with him?
found out why he isn't pulling his weight, etc. You may be able to fix the
issue without letting him go.

This is the reason for vesting ownership shares, so that the people earn their
shares over time, rather than all being divided up at the beginning.

I had a similar issue with a friend I brought on as co-founder. Thankfully he
was 'stolen' away by another company, so that resolved the issue of his
involvement, and I very candidly brought up the issue of ownership ,as he was
around for such a short period of time, and we hadn't reached enough
milestones to match the value of the amount he would have owned via the vested
ownership. We worked out a smaller percentage which we both thought was more
fair based on what he had accomplished in his short time.

If this guys head/heart were and are in the right place, he'll want to work
with you on what is best for the company. If not, then you may have to get
some legal advise.

But I would first talk to him about the issues, and see if the team can
resolve it.

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pg
The solution to this problem is vesting. Unfortunately it is not a solution
you can apply after the fact.

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knightinblue
Can you elaborate a bit?

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staunch
If all of these co-founders were vesting over years this person could be
booted without walking away with an unfair amount of equity.

[http://www.payne.org/index.php/Startup_Equity_For_Employees#...](http://www.payne.org/index.php/Startup_Equity_For_Employees#Vesting)

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skmurphy
It sounds like he is capable of acceptable work for your team but is not
performing to his earlier level: do you understand why? What's his side of the
story? The best outcome would be to enable him to continue as a fully
contributing member unless there are additional facts that indicate otherwise.

Is there someone that both you and he trust that you could use to mediate a
serious conversation about how to resolve the situation? The 15% founder
should be willing to sell you back 12-14/15's of his stock since a normal
vesting period would be four to five years from a standing start. He may not
be willing to do so.

