HACKER Q&A
📣 peacefulprofits

How to renegotiate with a $6M startup as a co-founder?


I have to consider leaving or renegotiating with a one-year-old $6M ARR startup I co-founded due to disagreements and disappointments over what was promised to me.

I as the marketing founder am entitled to 20%, while the other technical founder who coded it is entitled to 80%.

I worked on it from scratch, for about 12 months, without pay.

When starting, we verbally agreed that I get 20% of the company after one year, and that's it.

Now the written contract draft can claw back 10% from me, even when it's vested, and then squeeze me out.

Is it reasonable to insist on 20% and full protection for what I own and its future benefits, with no strings attached and a guaranteed board seat, so no squeeze-out is possible? - They still think it's unreasonable and a red flag for future VCs.

I don't want to leave now. But neither I want to risk leaving empty-handed for working insanely hard already and continuing to do so for more years.

What would you do, besides getting a lawyer?

Thanks!

  👤 tdullien Accepted Answer ✓
I think it is fair to insist on what you were initially promised, but also make sure both sides understand each others' motivations properly. If both parties work in good faith, usually finding a point of contention in a contract draft means that one party has a fear that it wishes to address with the clause; finding a peaceful resolution usually means understanding that fear and finding a more palatable / jointly acceptable solution.

One thing that has worked for me in the past is asking the other person: Hey, I find this clause to be harsh and difficult to accept -- what are you trying to do with that clause? What scenarios are you trying to protect yourself against? Can we find a different way of addressing this?

👤 frans
Sell your 20% in cash and get out. You'll have the money in the bank and ready to start something new. There are tons of technical founders looking for someone who has grown from 0 to $6M in a year. (which is huge). If you stay, you'll have a few years of misery.