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Firing a founder

We had two core cofounders and decided to add two additional cofounders (a general counsel and a chief architect) to dramatically increase our changes of success. Both came well-recommended after an extensive search.The GC is doing a bump-up job, but the architect is simply not producing. It's not a question of ability -- he's very bright and can crank out great code and designs when needed. He's just unreliable in terms of meeting commitments and definitely not performing at the level commensurate with his potential equity grant.

I've had some general conversations with him about this, as well a one "Come to Jesus" convo that clearly laid on his past performance, our expectations, and a go-forward strategy. He admited that he wasn't properly engaged and pledged to redouble his efforts. I told him that he'd be a close contact in the coming weeks to give him feedback on how things were going.

This guy is worth saving in that he has a lot to offer the team, as well as building product vary ahead of our first round (coming up soon). He doesn't appear to be gaming the system, and acting maliciously. I guess that I wasn't expecting normal employee performance issues so soon among founders, who usually have outsized intrinsic motivation and incentives to kick ass.

In a corporate environment, I would let this go on for awhile before pulling a switch (I've managed hundreds of folks over my career). Any stories out there in FD land regarding similar issues and how they were handled. Don't need help on the legal side -- that's well in hand.



19 Replies

Matt Schaar
5
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Matt Schaar Entrepreneur • Advisor
Client Services at Promolytics
Having been let go as a co-founder with absolutely no warning from my fellow founders nor the Board (long story), I can say that your approach has been entirely refreshing to hear. These are conversations that should take place in stages and over a comfortable, but not extended, period of time. At the end of the day, I think the decision for any founder to depart should ultimately lie with him/her. If the founder in question simply is not in the right environment for him/her and the company to succeed and thrive, then it's in the best interest of all parties to consider a shift. I'd have some honest discussions about the working environment for your architect and whether it's right, as well as with your Board/investors to address your concerns and solicit their own feedback on your founder. Long story short: transparency and honesty throughout the process makes it far less messy and healthy for all parties involved. Move swiftly, but openly. Best of luck. - Matthew Schaar +1 248 229 1916
Daniel Lo
1
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Daniel Lo Entrepreneur
Co-Founder at LawGives
You didn't say anything about where they were working... If they are not in an office, there may not be enough social "umpf". In addition, they may have had a bad transition, between one work environment to the next; perhaps a 1 week vacation.

my 2c.
Joseph Galarneau
0
0
Joseph Galarneau Entrepreneur • Advisor
Founder and CEO at Mezzobit, creating transparency and control for Internet data
@Daniel: Two of our cofounders are working PT (in conjunction with day jobs) and two are working FT on the project. Everyone is telecommuting with periodic in person meetings and concalls. We'll all co-locate in the next 30-60 days (waiting list for the right space). We also have a smattering of offshore developers who we all deal with.

The cofounder in question has been on board for three months, so I'm factoring out transition effects, as we've been more closely working at his performance over the back half of that range (past six weeks).
Brian McConnell
6
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Brian McConnell Entrepreneur
Head of Localization at Medium.com
I think you've answered your own question. If you already had to talk with this person about subpar performance, the sooner you cut him loose, the better. You gave him an opportunity to earn founder equity, which he has to earn. If he won't deliver now, that's very unlikely to change. You can't afford to have a non-performing technical co-founder. That's a company killer. My advice: find someone else ASAP.
Joël Cheuoua
1
0
Joël Cheuoua Entrepreneur
Senior Staff Engineer at Tintri
Hi Joseph, Sounds like a difficult spot to be in :( many kudos for tackling the issue hands on. Off the cuff ... and even though I realize we're talking founders and not employees (although they seemed to have been recruited in a similar fashion than employees) it reminds me this thesis: http://venturebeat.com/2013/02/06/why-hiring-b-players-will-kill-your-startup/ That of course has its antithesis: http://venturebeat.com/2013/02/22/why-hiring-unicorns-will-kill-your-startup-faster-than-b-players/ Both excellent food for thoughts I think? Best, Joel.
Mike Winer
1
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Mike Winer Entrepreneur
Passionate about bringing people together to achieve personal & organizational results in mission and market
Joseph, you wrote about how you gave him some time and then had some general conversations with him a few times and then, finally, a "Come to Jesus" meeting with expectations you clearly laid out. At which point he admitted he wasn't properly engaged. But, of course, at that point he had no choice.

In what you've written, you don't describe how you listened to him in ways he could feel really heard. There may be issues outside the business and/or inside. The only fair thing is to sit down with him and ask "What's happening for you." Are there ways we can help. And you actively listen with no expectations and especially with no desire to immediately counter his perception or feelings. You are just there for him. It seems like a waste of time because he appears to be 'the' problem, but I think you'll find it's a real gift to yourself.

I have a 2-page paper I'd be glad to send you on "Powerful Listening." I don't see how to attach it here but send me a quick email at [removed to protect privacy] and I'll reply with the paper attached. There's also a paper by Carl Rogers the GrandDaddy of Active Listening. In the paper. which you can find at

http://www.go-get.org/pdf/Rogers_Farson.pdf

he writes: "If I want to help a man reduce his defensiveness and become more adaptive, I must try to remove the threat of myself as his potential changer. As long as the atmosphere is threatening, there can be no effective communication. So I must create a climate which is neither critical, evaluative, nor moralizing. It must be an atmosphere of equality and freedom, permissiveness and understanding, acceptance and warmth. It is in this climate and this climate only that the individual feels safe enough to incorporate new experiences and new values into his concept of himself.

And forgive my effrontery, I hunch it's the same for you. It's not easy to change our ways. I wish you the best. Mike
Kamran Janjua, MD
0
0
Kamran Janjua, MD Entrepreneur
Diagnostic Radiologist at Matrix Radiology Associates
I really like the articles Joel mentioned. I've (sort of) had a similar issue with potential cofounder(s), and, now that our roster is set, I am glad I didn't keep those other folks around.

If you simply have to have this guy, I'd recommend a reduced base equity grant, and then performance milestones (especially if this person is a CTO). You could also just scale back equity and offer a profit-sharing arrangement. Finally, if the position is a sales-type role, then a commission works well.

For my cofounders, I have offered a blend of those arrangements, and we have been very happy with how things look. People need different kinds of carrots to incent them - one size does not fit all.
Michael Brill
0
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Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
I'd told some version of this story several times and the advice I always get is "fire fast." Ever the optimist, I ignore the advice and try to fix it. I never succeed.
Labhesh Patel
1
0
Labhesh Patel Entrepreneur
Chief Data Scientist at Abzooba Inc.
Joseph,

You'd be the best judge of this, but you need to quickly figure out how easy it would be to replace him. It seems like he is a sharp guy and can produce when he's motivated, but as a co-founder, his motivation needs to be at 100% all the time. The general consensus in the valley is that smart technical co-founders are hard to find.
Are you able to better quantify for yourself as to how much equity participation this person deserves for the engagement he is showing? Is it even worth thinking along those lines? Would he be interested in a contracting role whereby upon his producing certain deliverables, certain amount of equity gets unlocked right away for him?
You should not need to flex your "motivator" muscles with co-founders so early in the game. At the same time, you need to make sure that his leaving right away doesn't put the project in jeopardy for several months as you look for someone else to fill his role.
I would not burn bridges, probably retain him as an informal technical advisor and give him equity encouragement if he helps recruit and transition his role to someone else.
Jose daVeiga
0
0
Jose daVeiga Entrepreneur • Advisor
Technical Due Diligence & Operational (SaaS Services) Expert
Joseph, if you have to ask, then you don't need to ask...this is one of those cases. In my humble but dreadful experience no one is worth saving... there is no such thing as saving. People who will help you build your company will be worth keeping (big difference). He might be a great guy, maybe even an A player, but for whatever reason he's not into it, etc. Ditch him asap. Startups are not a normal situation of corporate business, because it's not corporate business. I learned the very hard and painful way that waiting for what's never going to come is always a bad option - big mistake and by the time you deal with it, tends to be too late. The sooner you get rid of him the sooner you move forward and into what really matters. I know this sounds harsh but it's the best option. I have stories but they are not worth telling at large. Just take my word for it. I do not have one instance where someone was on the fence like your guy and they turned the corner. Invariably I should have dealt with it sooner, and it was never soon enough... Best of luck. Dealing with such a thing is hard. But take my word, the longer you wait, the harder (and potentially catastrophic) it will be, Jose
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