Nov 22, 2021, 1:00 PM ETInterview

Co-Founder Mistakes That Kill Companies & How To Avoid Them

Prioritize relationship compatibility over initial skill matching: Founders often mistakenly select co-founders based solely on technical skill sets, assuming those skills are static, whereas most skills are learned on the job; working with a compatible partner allows for joint learning and reduces the risk of fatal relationship breakdowns.
Validate co-founders through prior conflict: The ideal co-founder is someone the founder has already experienced disagreements with or "fought" with, as this pressure-tests the relationship before it is legally binding; relationships that have never faced conflict often collapse immediately upon the first serious business disagreement.
Formalize agreements early: Founders must write down equity splits, vesting schedules, and dispute resolution protocols at the outset to avoid ambiguity when handling bad actions or disagreements later.
Select co-founders before developing the idea or fundraising: Adding a co-founder after the idea is formed or funding is secured creates a perception of "your company" rather than "our company," harming retention and ownership mentality; founders should establish the co-founder relationship first, then ideate and raise capital collectively.

Disputes are a primary kill switch: Co-founder disagreements are more likely to destroy a startup than any other single factor; untreated conflict avoidance or "fighting dirty" often leads to a situation where a breakup becomes inevitable.
Stress management profiles vary: Co-founders must understand how each other handles stress, as some respond by attacking while others retreat; recognizing these triggers allows for better interpretation of behaviors during high-pressure periods.
The "8-hour rule" signals imminent failure: If co-founders do not speak for extended periods despite spending 12+ hours together daily, the relationship has likely deteriorated to a point where separation is the only viable option for the company's survival.
Delaying a breakup escalates damage: Prolonging a toxic co-founder relationship increases the likelihood of litigation, complicates the capital table, and worsens the vesting status of equity, making the eventual separation more destructive.

Equal equity splits are preferred but require tie-breakers: While near-equal ownership reduces drama, a strict 50-50 split creates a deadlock risk; a practical solution is for the CEO to hold one additional share to serve as a written tie-breaker vote in the event of an impasse.
Written protocols prevent fatal deadlocks: Establishing a mechanism for tie-breaking votes in advance ensures that equity structure supports decision-making rather than stalling it.

Co-founders are a strategic superpower: Having a co-founder is highly recommended for the pre-product market fit phase, as it provides a "superpower" for surviving the hardest parts of the startup lifecycle.
Do not attempt to "re-roll" a failed relationship: Founders should not assume they can quit a bad startup and easily restart; rebuilding from scratch is significantly harder than fixing the initial co-founder setup, and the opportunity cost of a failed restart is high.
Investment in the relationship is non-negotiable: Founders must treat the setup and maintenance of the co-founder relationship as a high-priority task from day one, avoiding a "50% effort" approach that can seed long-term failure.