Founder Leaving Startup, How?

3•burneracount_sf•2h ago

My cofounder asked me to leave our startup.

I own around 10% (vested), the company is doing enterprise b2b. It's a venture-backed startup currently "valued" at ~$20M based on SAFEs.

Right now ARR is at around 600k. Growth was flatlining for the last 2 years. Next year it will probably double to around 1.2-1.4M ARR (got them some deals recently that will convert next year).

Company is in a market that - if they do not add additional services - is not A) very big (maybe TAM 1B max). The market has very low margins.

What is a reasonable way to part? Would you optimise on cash pay out or equity?

Comments

ilamont•2h ago

"Reasonable" will vary depending who you talk to.

If you are vested, I would be talking with a lawyer to make sure your interests are protected

codingdave•2h ago

Your corporate governance docs should already have the mechanics in place for how this could work. Ask whomever is your attorney/accountant, and be ready to get one of your own.

That being said, try not to accept equity. They can easily dilute that down to nothing in future deals. Ask them to buy out your stake, negotiate as appropriate to agree on a number, walk away with cash, call it a success story, and move on to whatever is next.

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