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Pick one of catastrophic or equitable. Are founder clean breaks possible?

1•mehctothroaway•1h ago
I'm the CTO of a seed-stage B2B fintech SaaS startup. We just closed our $5M seed round. It took us far longer than we would have liked to raise, but we now have plenty of runway. A fair, but not great, number of customers, some of whom REALLY like our product. But we're still far from profitable and our growth numbers are eh. It's hard, but not impossible, for us to stay differentiated from the larger players in our space. We recently launched a large product that's requiring us to go after a new target market. We're pretty confident in our hypothesis here, but time will tell. Time will tell is maybe the best way to describe the current state of the company. Nothing's going wrong. But are we the high-growth company we and our investors thought we'd be? Not really. We have a small engineering team but no one that I'd immediately tap as a successor.

I've been cracking away at this with my two cofounders (I'm the only technical cofounder) since late '21. I'm not burnt out per se, but I'm not really feeling it. The work isn't as intrinsically motivating as it used to be (and I'm struggling to find the extrinsic motivation, as rational as it should be to find, fwiw). I've found this isn't my calling in life. Outside of work, I've maintained a strong passion for and involvement in law. I'm not looking for career advice about law school. It's something that I have strong enough conviction that I will find far more fulfilling than my startup.

What I am asking is if a clean break is possible given my vested equity. Yes, people quit startups (and change careers) all the time. But do founders leave without completely blowing up what they started? Do they do so equitably? How would an investor not scoff at the idea of buying the technical founder out early? What if I just want to sell my equity to just pay for a portion of law school (at a value well below our "FMV"). Or is this hubris to think that they'd see me as the lynchpin of the company? How do these things go in the real world? I haven't built up the startup-street-smarts to know this yet.

I haven't told either of my cofounders or any of our advisors about this. I don't want to rock the boat (yet). If the reality is that this would be catastrophic, then I'm prepared to shut up and I guess keep CTOing for another year in the hope for an exit that I don't see as particularly likely quite yet.

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