When to Fire Your Co-Founder

When co-founder relationships break down, it’s not just business—it’s deeply personal. Here’s a practical guide for founders who’ve tried everything and know it’s time to act.

Key Takeaways

• Some co-founder breakups can’t be fixed—act when it’s time.
• Avoiding the issue slows your startup and poisons the team.
• Your Shareholders Agreement is the starting point, not the final word.
• Lead with business logic, not personal frustration.
• Plan, communicate, and follow through—cleanly.

The co-founder relationship is one of the most intense you’ll ever experience.

The strongest business partnerships often start as personal friendships. But even the best friendships aren’t immune to the pressures of scaling a business.

There’s nothing like running a company to expose someone’s flaws—including your own.

I remember once asking my sister—a counsellor—for the secret to saving relationships. I was secretly hoping for a quick fix that only psychologists knew about. Instead, she said something simple that stayed with me:

“What will be will be.”

At first, I was disappointed by the response. But over time, I’ve come to appreciate its wisdom.

It doesn’t mean “don’t try”—all relationships require effort. But sometimes, even effort isn’t enough.

Before You End It: Consider Relationship Coaching

Before we jump into how to end a co-founder relationship, let’s first discuss how you might save it.

Many co-founders have found relationship counselling to be transformative. It works when all parties:

• Willingly engage
• Show self-awareness and take responsibility
• Learn new communication skills
• Share long-term goals and values
• Are open to change

I strongly recommend trying counselling first. It can make a real difference.

But it doesn’t always work.

Sometimes, one person won’t put in the time—or denies there’s even an issue. Maybe one co-founder lacks the skills for their role but won’t consider a different role with less perceived status. And sometimes, it really is “irreconcilable differences,” as the celebs call it—which usually means they’ve lost respect for each other.

Five Questions to Reflect On

Before taking a final decision, there are five questions I recommend you work through:

1. Is this about them—or is it just what happens when two people are under extreme pressure, building something hard?
2. Have you said what really needs to be said—calmly, directly, and fully owning your part?
3. Are you holding them to an impossible standard that even you couldn’t meet?
4. Are you genuinely ready to carry the full weight of the business without them?
5. Do you still believe parting ways is the right call after calm, clear reflection—not just in moments of frustration or fatigue?

If the answer is “yes” to all, keep reading.

What Happens If You Don’t Act

It’s tempting to put off making a decision as long as possible. But there are consequences that go far beyond your immediate working relationship:

First-order consequences: Your mental well-being suffers. You’re distracted, drained, and unable to focus fully on solving critical business problems.

Second-order consequences: Your organisation becomes siloed. Conway’s Law tells us that organisation structures mirror relationships. So when co-founders stop talking, collaborating, and showing each other respect, the team notices—and follows suit.

Third-order consequences: Your company slows down. Speed is critical for startups, but when every decision becomes a tug-of-war, you lose momentum—and growth suffers as a result.

If months (or years) of discussions haven’t worked, it’s time to take action.

This is Conway’s Law in action: Your organisation’s structure mirrors your team’s relationships.

What I’ve Learned from Founder Breakups

I’ve seen many co-founder breakups—both firsthand and as a Founder Coach— and there are patterns:

• They happen at every stage—from pre-launch to post-Series C.
• In 9 out of 10 cases, the CEO stays.
• Departing co-founders keep their co-founder status and some ownership
• The Shareholder Agreement (SHA) defines what happens to shares.
• The board and team care less than you expect, with reactions ranging from “if you say so” to “I saw that coming.”

Here’s what to do before making the move: 

1. Review the Shareholder’s Agreement

You’re probably worried about equity.

Read your SHA carefully. Use AI tools to clarify the legal language if needed, and consult your lawyer. Outside of a new negotiation, the SHA is what governs the outcome.

2. Seek Advice from the Board

Don’t let your board be the last to know. They’ve seen this before—it’s common.

Approach them respectfully and discreetly. Avoid leading with feelings or frustrations, and instead articulate the business rationale around why the co-founder needs to leave. This may include skill gaps, cultural issues, or strategic misalignment.

3. Write a Detailed Plan

The more clarity you have going in, the better the outcome. Answer these questions before any difficult conversations:

• What’s your proposed agreement? (Coordinate with your lawyer and board, and ideally have a document ready.)
• What’s the handover period length? (It can be long if the relationship is good, but short or none if not.)
• What’s your internal comms strategy?
• How will you inform external stakeholders?
• Who will support you on administrative tasks?
• Will you maintain contact afterwards? If so, how frequently?

Don’t improvise. Prepare!

4. Prepare Your Communications

How you speak with your co-founder matters. You have two basic options:

Option 1: The direct approach. One clear, decisive conversation. High risk, but fast.

Option 2: The phased approach. A first conversation to raise the issues and listen. A second to deliver the decision after reflection. Slower, but respectful. This is my preferred approach.

Whichever path you choose, your intention matters greatly. If your goal is to preserve the relationship, be honest, empathetic and generous.

If It’s the Right Thing to Do—Do It

Letting go of a co-founder isn’t just a business decision—it’s deeply personal.

Once you know it’s the right call, you owe it to your company, your team, and yourself to follow through with clarity and care.

Yes, it’s hard—and there are risks. But staying in a dysfunctional relationship often carries far greater ones.

You became a founder to build something great. Sometimes, that means making the hard call.

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Originally published on May 15, 2025.

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