The Brutal Math of Co-Founder Breakups: What 22,000+ Founding Teams Tell Us About Your Odds
If you’re building a 2-3 person founding team, there’s a 23% chance one of your co-founders will leave within the first 3 years. And that number is getting worse, not better. More and more founders are breaking up.
New data from Carta analyzing 22,352 founders in 2-3 person teams who raised VC between Q1 2016 and Q2 2023 reveals some uncomfortable truths about co-founder retention that every founder needs to internalize before they split equity.
The Core Finding: One in Four Co-Founders Won’t Make It to Year Three
Let’s start with the headline number. Looking at the 3-year mark across the dataset, approximately 23% of co-founders have left their company. That’s not a rounding error. That’s nearly one in four founding teams experiencing a co-founder departure before they’ve even gotten the product-market fit engine humming.
But here’s where it gets more interesting—and more concerning.
The Trend is Your Enemy: Co-Founder Departure Rates Are Accelerating
The most striking insight from this data isn’t just the absolute numbers. It’s the trajectory. Recent cohorts are showing significantly higher departure rates at equivalent time intervals.
Compare Q4 2021 cohorts to earlier years at the 3-year mark. The data shows a clear uptick. Where 2018-2019 cohorts were seeing roughly 19-20% departure rates at 3 years, the 2021 cohorts are pushing past 23%. That’s a 15-20% increase in co-founder departures in just a few years.
The annotation on the chart says it clearly: “A higher percentage of founders are leaving within 3 years lately.”
The Time Curve: When Co-Founders Leave
The data reveals a remarkably consistent pattern of when co-founder relationships fracture:
The danger zones:
- Years 1-2: Relatively low risk (5-10% cumulative)
- Years 2.5-4: The danger zone begins (climbing from ~15% to 25%)
- Years 5-7: Maximum risk (30-40%+ cumulative departures)
What’s happening here? The first 18 months is the honeymoon period. You’re fundraising, building, energized by the mission. But somewhere between year 2 and year 4, reality sets in. The company hasn’t scaled as fast as you hoped. Someone’s role isn’t working. Interpersonal dynamics fray under pressure. Financial stress mounts.
By year 5, more than 30% of founding teams have experienced a co-founder departure. By year 7, some cohorts are pushing 40%.
What the Color Coding Tells Us
The heat map progression from green (under 10%) through yellow (15-24%) to orange and red (25%+) visualizes the increasing risk over time. Notice how quickly the colors shift from green to yellow—typically within just 2-3 years of incorporation.
The orange and red zones (25%+ departure rates) begin appearing consistently around the 4-5 year mark and deepen as companies age.
Why This Matters More Than You Think
Most founders obsess over equity splits when they incorporate. They should be equally obsessed over vesting schedules, acceleration clauses, and departure scenarios. Because the data is crystal clear: there’s a higher probability of losing a co-founder than most founders admit.
This isn’t just about hurt feelings or awkward conversations. Co-founder departures create:
- Cap table complications
- Fundraising red flags for investors
- Knowledge and relationship loss
- Team morale issues
- Potential competitive threats
What Should You Do With This Information?
1. Take vesting seriously. Four-year vesting with a one-year cliff isn’t just a VC ask. It’s protection for the company and the remaining founders when (not if) someone leaves. And 4 isn’t enough for founders. Consider 7-10 year founder vesting, starting at date of funding, with no credit for “time served”. This solves for a lot.
2. Have the hard conversations early. What happens if someone wants out? What if they’re not performing? What if they need to leave for family reasons? Document it.
3. Recognize the 2.5-4 year danger zone. This is when most departures accelerate. Be especially intentional about communication, role clarity, and relationship maintenance during this period.
4. Plan for it. Build your company assuming you might lose a co-founder. Don’t create single points of failure around one person’s relationships, knowledge, or capabilities.
5. Consider the recent trend. If you’re founding a company in 2024-2025, you’re facing even higher co-founder departure rates than founders did five years ago. Whatever structural or cultural factors are driving this increase, they’re real and accelerating.
One Of You Will Likely Leave. Plan For It.
We love the mythology of founding teams that stay together through IPO. But the data tells a different story. Building a successful company is brutally hard, and maintaining co-founder relationships through that journey is even harder. The odds say one of you probably won’t make it to year five.
That’s not pessimism. That’s reality. And the best founders plan for reality.
The question isn’t whether your co-founder relationship could end. The question is whether you’ve structured your company to survive when it does.
