Co-founder Breakups

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Disclaimer: This is not official legal advice or financial advice!

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Dealing with a Founder Break-Up Guide

Founder break-ups are tough, emotionally, practically, and legally. The steps you take depend on what stage your venture is at.

Step 1: Identify What Stage You’re At 🧭

Before you decide what to do, clarify the type of venture you have.

This determines what actions and documentation are required.

Stage	Description	Recommended Next Step
Informal project	A student or early-stage idea with no formal structure, no investment, and no legal incorporation.	Discuss intentions, document decisions in writing (email), and consider if continuing is viable.
Registered company	A company registered with Companies House, possibly with a founders’ agreement, equity split, or early revenue.	Follow formal exit steps (legal advice, share transfer, Companies House updates).
Invested company	A company with external investors, grants, or IP agreements.	Seek legal advice immediately and notify relevant stakeholders before making changes.

Tip: Even in early stages, get in the habit of documenting decisions. It will save time and stress later.

Step 2: Have the Difficult Conversation 💬

Why: Clear communication avoids misunderstandings.
How:
- Meet face-to-face (or online if needed).
- Clarify intentions: Is one founder leaving completely or just stepping back?
- Stay calm, avoid blame, and focus on the next steps.

Tip: Take notes of what was agreed and send a follow-up email to everyone.

Tip: Avoid WhatsApp or social media, use email or another recordable format.

Step 3: Review Your Founders’ Agreement (if you have one) 📄

Check for clauses about:

Equity ownership
Roles and responsibilities
Vesting schedules or exit terms