Co-Founder Issues – Get Resolve Early

I have noticed many launched start-ups fail not only due to lack of capital, lack of product portfolio, competition and lack of awareness to their product pricing; but they fail just because of their co-founders mismatch and misunderstanding between them.

Many of you might have noticed in time that there are circumstances which do not match as per your expectation with your founding member or partner.

There are few critical points, which are good if they can be resolved or can be agreed on as early as possible, so that you will have a smooth run in your company and your company can have a bright future.

• How you will divide the shares? In case of two partners many of you do 50-50% which is fine and many of the start-ups have done well; but sometimes 50-50 partnership causes a problem in making strategic decisions. It’s also relevant in this case to think of a question before launching a business- Do I really need a Partner?

• How the profit will be shared or who gets what return from their company?  i.e. compensation. Sometimes the idea of ‘I do more then you’ becomes heavier in partnership.

• Who will make the operation decision related to product pricing, marketing, hiring of professionals and who should be doing a strategic decision to lead the company? In such case I go for ONE CEO.

• It’s worth to discuss the personal goals of the founders about the company future and also about a question - Will they be taking it as primary job to run the company; in case they have other companies in hand or have a full time job with good rate of pay ? This clear picture will lead to better understanding between the partners and good results for the company.

• There comes a time when some founding member does not wish to continue with the organisation and they want to leave. In such cases it is better to be clear on the exit policy for partners. This situation can really have a bad consequences not only for the business but the in the eyes of people who work in the organisation.

Many conflicts can be resolved with negotiation and understating or with a mediator/advisor to resolve the conflicting situations. And, many can have bad headaches all nights with door opening to legal dispute resolution. 

It’s worth to discuss as early possible.

Digvijay Thapa

Digvijay Thapa helps small business grow . Get connected via https://www.facebook.com/ForgottenSutra 

( The writer doesn't take any responsibility and liability of using his blog contents to implementation  by anybody in their business, in doing so by any entrepreneur  will be at their own decision  and will be doing by their own test and analysis results and writer doesn't have any involvement and liability in their action)