Cofounder Exit Offer

Question

I had 15% vested over two years of a seed startup operation. 100k in funding at 9m valuation. 50k arr. We started to disagree a lot, to the point of planning a split. The cofounder who wants to keep the company wants to take back 14%. On grounds of for cause termination. I was open to giving back some equity but this seems like a lot. Thoughts?

toomuchtodo · Accepted Answer

I recommend you call George Grellas&rsquo; practice, ask for a consult for valuation and exit guidance. No affiliation.https://grellas.com/our-team/george-grellas/

explorer01 · Answer

I know nothing of this world but I&rsquo;m curious what incentive do you have to give back equity that is already yours? Wouldn&rsquo;t a company just buy it back in some way or dilute you once they get more investment?

smt88 · Answer

Talk to a lawyer.

dustingetz · Answer

you can negotiate in advance a buyout at the next fundraise event, like if he raises 2 mil you will get 200k in exchange for the 14. I will note that you should try not to anchor on the safe cap, it&rsquo;s not an equity valuation, the company FMV is something like $900k even with the revenue, valuing your 15% at 135k which seems about right

Cofounder Exit Offer

I recommend you call George Grellas’ practice, ask for a consult for valuation and exit guidance. No affiliation.
https://grellas.com/our-team/george-grellas/

I know nothing of this world but I’m curious what incentive do you have to give back equity that is already yours? Wouldn’t a company just buy it back in some way or dilute you once they get more investment?

Talk to a lawyer.