My co-founder is threatening to quit unless I give him more equity; what should I do?

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JASON LEMKIN

Generally, this is the last, best chance to fix things.

Founder equity splits are a tough thing. What seems fair on Day 0 may seem less fair on Day 720. The one that seemed the weaker of the 2 may end up the stronger. A lot can change.

But the thing is, startups are Positive Sum gains. Even owning 10% of something worth $1b+ is nuts.

So if things are fair, they tend not to come a boil here.

And if things are totally broken, one co-founder quits. Or leaves. Or stops working very hard. Etc.

Here, things are probably close to broken.

I’d try to fix it — if you want to keep her / him. And I’d do it with an additional fair equity grant that vests over 5+ years.

I did it. It worked.

But if the vesting on the next grant is an issue, that founder is already gone, anyway. As hard as it is sometimes, that means it’s time to move on. A little more here: A Simple Commitment Test For You And Your Co-Founders – SaaStr

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Published on March 14, 2018

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