How To Settle A Dispute Between Co-Founders In A Startup ?
Ravi Kikan
Loves Transforming & Scaling Startups into Successes | Board Advisor - Nasscom Community | Driving Growth & Innovation as a Proven CXO in AI, SaaS, FinTech, HRTech, HealthTech, Healthcare, Mental Health, DeepTech & More
More often than not and specially when a startup takes off and reaches the growth stage this is one of the things that can sometimes hammer the hell out of the whole startup system.
A dispute...A dispute specially between the co founders
From my personal experiences there could be a myriad reasons why this might happen. Sometimes it is the culture change that one co founder may find difficult to adjust to or sometimes it is the way of aggression that one co founder might suddenly evoke to take complete control of the system or sometimes it just might be pure greed for money that one of the co founders might start seeing and might want to bite a bigger share of the pie.
There could be 1 million more authentic reasons for disputes HOWEVER the biggest alternate way to balance this out is the SETTLEMENT process.
So how to settle a dispute between co-founders ?
- Should you have a non-verbal commitment ?
- Should you have things laid out pointers as part of the founders agreement in the very beginning which includes of all the possible outcomes to avoid any disputes in future ?
- Should you involve a legal intrusion and go with facts ?
I asked this question in the Startup Specialist Group on LinkedIn and there were some interesting answers to this question.
Iain Reed added
" One of my old lawyer friends (who is now one of our shareholders) told me to sign a shareholders agreement. Another old lawyer friend introduced me to a one man band who helped us draft an equitable SHA based on a 50:50 partnership. I would say that this agreement has been one of the key factors in the survival of the company for 13.5 years.There is no replacement for mutual respect and hard work, but in settling disputes that black and white agreement which cost US$2,500 to draft has saved the us from the number one reason for startup failure - founder divorce - although this presupposes that co-founders act with integrity without which the company is doomed anyway "
Preeti Gandhi added
Business is about making money. The 'money factor' causes of rifts and disputes, can easily be preempted and guidelines laid out in paper work format (agreement, MOU, partnership etc). Even responsibility clarity and accountability can be greatly simplified through well thought paperwork
So what are your thoughts ? What has been your experience ? How did you handle it ?
Do take out 5 minutes of your time and share your experiences or what you have seen around, hope this will help startups to look at this ambiguity in a better and clearer way :)
Have a great weekend :)
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Data Engineering Chapter Area Lead in Chief Data and Analytics Office at Commonwealth Bank
6 年you can alwas find a way to go around the documentation - the relationship, bonding and values will keep together; not money and documentation!
Have to say, if I had 2,500 dollars I'd be spending it on a laptop for one of my developers- this is more of a pro-tip for pros I think!!
VP Digital Transformation HGX Technologies LLC
7 年haha interesting caption. disputes between cofounders can never be settled through legal. most reasons are due to greed and external people. best way to deal start playing sports togetger representing same team. that would make them realize the motive behind coming together. and its good to post these titles solutions can never come through these posts. just curious reply to post.
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7 年Have the hard conversation before you do business together. You must freely discuss and agree on pre-determined outcomes for possible future disagreements. Write it down now. You can never have a sane discussion when in the middle of a knock-down dispute. It will never get easier once money and time have been invested. If you didn't do this, and are in the middle of a dispute, you have to go back to square 1 and start over. Start over by remembering your shared vision that started the business. Start over by proclaiming respect for each other. Approach the dispute from your roots, not the current context. Figure out where your shared interests took different paths. Resolve the difference, or dissolve the business (because you can no longer walk together).
Key Account Buyer na Sucalog
7 年Ravi Kikan, dear friend..congrulations for your excelente and brilhant work with start ups...i need to send an email for you....whats your email ?...thanks a lot. Best.