Ask HN: When to give up on a (non-performing) partner/co-founder?

1 points by wedtm 13 years ago | 4 comments

I initially started work with another person on a SaaS hosting company. This person moved to my town to work with me for 4 months, before leaving out of the country.

When they left out of the country, they hadn't contributed anything to the production version of our site, except a minimal site design, which was completed in the first month.

There was minor things checked into Github, but nothing that would represent a 50% share of the company that we had set out to build.

My question is when? When do you give up on them? When do you cut your losses, and walk away from something you believed in?

rosenjon 13 years ago |

Do you have legal paperwork defining the 50/50 split?

More importantly, if he isn't pulling his weight, you need to have a "come to Jesus" meeting, where expectations are set. Make clear that you want to continue with the business, and that if he doesn't perform, you would like to split off and work on your own, and are willing to give him a 10% equity stake to walk away. Barring that, you are going to walk away yourself and start from scratch with a new partner (this time you will maintain control, and use an earn-in structure for future partners).

rukshn 13 years ago |

I think it's better to drop them if they're holding you from getting to your target. The best example is how Mark Zuck, Dropped Savrin when he was not letting mark to get funds from VCS

wedtm 13 years ago | |

How do I accomplish that when they're a 50% partner? I'd really like not to go the legal route, but it seems this is the only actually viable option.

rosenjon 13 years ago | | |

Have you set expectations yet? I think you need to first discuss why he isn't pulling his weight, and tell your partner that if things don't change, then you are going to have to figure out how to continue the business without him. First tell him what you expect, and if he doesn't agree and you can't come to a compromise, then give an ultimatum.

At this point, it probably doesn't make sense to get in a legal fight. I think worst case scenario is you break off and continue on your own, and jettison the minimal contribution your partner has made to the project. It doesn't sound like the business is at the point where he is going to lawyer up and sue you. It would cost you both more than its worth at this stage.