Yesterday afternoon, I was chatting with a great founder. She was having a really hard time — her two co-founders had just left the company.

People rarely talk about co-founder divorce. But it happens, and when it does, it has a profound effect on a company.

After a co-founder breakup, your startup can be better or it can be worse. Here’s how to take that rotten situation and make it a win.

A Painful Time

The founder I spoke to really struggled with the loss of her co-founders.

I can only imagine the emotional rollercoaster involved. One must feel abandoned, even hopeless at times.

But when we spoke, she was beginning to bounce back. And that’s the key.

In a situation this stressful, anyone will feel sad and upset. The key is to get through it and not give up.

Your company fails on one condition, and one condition only: if you give up. Until then, you’re alive.

Get through this tough time, and you’ll be stronger for it.

When Divorces Sink a Company

I think the founder I spoke with yesterday will be okay. But I had a front row seat for another co-founder divorce, and that one was a lot uglier.

A while back, I invested in a fantastic SaaS company. The round was led by one of the best early stage funds on the planet. Revenue growth was nuts, nearly doubling every month.

“There are no sure things in startupland,” I said to myself. “But come on, this is basically a sure thing.”

Oh Francis, how little you knew.

Right after the round closed, one co-founder pushed the other out. Ever since, the company has been going down the tubes.

As funding tightened in 2022, the surviving co-founder did nothing to cut burn. The company was burning almost $200,000 a month, obscene for a seed stage company.

As we sit here in the summer of 2024, the company is likely to shut down any day. We’ll be lucky to recover a cent.

They snatched defeat from the jaws of victory.

Lessons From a Bad Break-Up

When co-founders break up, the fate of the company depends on the quality of whoever takes over. Unfortunately, this fellow was a lot better at company politics than he was at actually running the startup.

If the folks who leave weren’t contributing much, you might actually see your company accelerate. So, not all break-ups are bad.

The key here is to avoid pointless fighting. And if a divorce does happen, move forward with the best team you can.

About That Second Marriage

Don’t be in a rush to replace your departed co-founders. You don’t want to go through this whole thing again in a year, do you?

Take some time and think. When you’re ready, I want you to try this:

Make a list of the 10 best people you’ve ever worked with. Contact every single one of them. Ask them to join you as a co-founder.

To be a great founder, you have to become a great salesman. And this is the most important sale you’ll ever make.

Avoid people you don’t know. You have no idea if you’ll get along with them or if they’ll work hard. Prioritize people you know, like and respect.

Wrap-Up

I felt sorry for the wonderful founder I spoke with yesterday. She was being put through the wringer through no fault of her own.

But I think her company will come out better for it. They’ve dropped the dead weight and will move faster because of it.

Maybe you’re in a similar situation. If so, know that it’s not the end of your company.

In fact, it just might be the thing that takes you to the next level.

Have you seen co-founders divorce?

More on tech:

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Four Cap Table Red Flags That Can Kill a Deal

Why You Shouldn’t Raise VC in the Summer

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