How Do You Buy Out Your Co-Founder?

I had four co-founders. I had to fire one of my co-founders within six months of us being operational. This was six months before we had any revenue. I’ll get back to the importance of revenue later in the story.

Picture: Depositphotos

The negotiation of “Randy’s” exit was simple. It took less than one hour to complete.

Here’s what you’ll need to make your co-founder buy out simple too.

Hopefully:

• You and your co-founder have employment contracts that cover what happens if you or your co-founder leaves the company. And hopefully…
• You’ve taken the steps to have your equity and your co-founder’s equity vest over time. But all is not lost if you don’t have separation agreements in place because…

You can still negotiate a separation agreement that’s fair between you and your co-founder, even if you don’t have a separation agreement in place.

Years ago, I was working with a founder that didn’t already have a separation agreement with his co-founder. Worse, the equity between him and his co-founder wasn’t vesting over time.

However, he was still able to negotiate a fair agreement between him and his cofounder. The steps were pretty…