What do you do when your company grew, but your cofounder didn’t?
Unfortunately this happens more often than desired – company grew from 5 people to 50, and the CEO has effectively stepped up and is now battle-tested, but his cofounder hasn’t grown as much and isn’t really pulling her weight anymore.
First thing to keep in mind is be very specific in terms of feedback.
Typical advice here is “have very honest conversations”. But I don’t think most people have trouble being honest. I think most people have trouble giving very specific, actionable feedback – or even know what exactly it looks like if the cofounder has indeed stepped up sufficiently.
I often see these comments given by the founder:
“You own x% of the company, which is a lot higher compared to others. That means you should step up big time, but I don’t see that.”
“Your leadership skill may have worked when we were 5 people, but now that we’re 50 people strong, it doesn’t seem to be working any more.”
“You don’t seem to have fire in the belly any more.”
These are just vague and won’t likely lead to any actions; rather, the listener will probably get into a self-defense mode immediately.
How will you know if your cofounder has successfully stepped up? What do the wins look like? Define those, have honest discussion with your cofounder, and try to get on the same page.
Then support her growth like hell. Be patient and give enough time (Who can meaningfully change in a month?) Support classes or professional counseling if needed. Your goal isn’t to fire your cofounder, you goal is to help her step up and grow so she becomes a world class cofounder and takes a huge chunk of your work off your plate.
The other tip is to make sure your cofounder hears honest feedback not just from you but from other people – especially her own team members (e.g. through 360 reviews).
Sometimes, she will take the exact same feedback 10x more seriously if it comes from her direct reports or independent advisers.
But if nothing works, it’s mutually beneficial to part ways.
If you decide to go that route, any unvested shares will have to go back into the pool. You don’t want a former cofounder who isn’t adding value any more to hold major shares on the cap table.
In rare cases, I’ve seen a cofounder staying with the company in a different capacity (e.g. as an independent contributor), but personally I’m not a fan of that approach.