How to distribute voting power among 3 co founders when there is couple in it?


4

So here is a situation, we are facing. We are three co founders - Saun, Sam and Joel.

Saun has been discussing about starting up with Sam and Joel who both happen to be his college mates. All the three have worked together on various projects and have a good understanding of each other.

Meanwhile, Saun and Joel are in a relationship.

When they finally decide to take the plunge into the startup, a confusing situation arises. According to Sam he is at a disadvantage as compared to the other two. He believes that since Saun and Joel are in a relationship and have a better understanding with each other , he is the one who would be left in the minority in majority of the decision making.

How do we resolve such a situation.

Founder Equity

asked Jun 1 '13 at 17:25
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Saun
21 points
  • There is no good answer to this question and it is a common dilemma, not just where couples are involved. In the end the founders either trust each other to always work for the good of the company, or they don't. – Steve Jones 6 years ago

2 Answers


4

  1. Sam should correctly realize that he's going to be a minority shareholder in a company where Saun and Joel are highly likely to stick together, and hold a controlling power. Sam can expect a high risk of a future conflict that might push him out of the company. Sam should push for a good shareholder's agreement which seeks to protect his ownership interests should he be forced out. And even so, he should understand that his position as minority shareholder leaves him vulnerable, no matter how good a shareholders agreement there is.
  2. Saun and Joel should realize that what they're doing is extremely demanding, and carries a high risk of them losing both their startup and their relationship. Couples in startups can work; but having a startup is high-pressure as it is, and seeing the same person in both business and bed often adds to that already high tension.
  3. Everybody should want a good share vesting schedule. While share vesting doesn't solve any root problems that might lead to a founder breakup, it does tend to make breakups a lot less painful.
answered Jun 1 '13 at 19:22
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Jesper Mortensen
15,292 points

1

For context, this is from my personal experience building businesses with my significant other. We've been co-founders for 5 years now (a small business, and a startup), and we were a couple for 3 years before starting our own business. Your mileage may vary!

I think Jesper's 2nd point is important: life as a couple and founders of a startup can be very demanding and will put strain in your daily life. You need to absolutely sure you both want this; there is unfortunately no way to prepare for that.

Regarding the "2 vs 1" situation: it needs not be a problem if managed appropriately. First of all, though, you all need to agree that it can become a problem so you can proactively defend yourselves from falling in a situation where your business gets hurt or where relationships between the three of you go sour (or both!).

I'd recommend:

  • start by making a commitment (Saun and Joel) of not making relevant decisions on your own. If you feel it's something important for the business (at beginning of a startup, most issues are), bring it up when the three are together;
  • related, but different: don't agree to a position between the two of you. Trust is critical here and Sam must not feel you two are "blocking" him of decisions, information or otherwise acting in an orchestrated way — since you are couple you'll probably agree on plenty of topics, so this will harder than it seems.
  • set specific roles for each member of the team: who takes care and is responsible for HR, Sales, Production, etc. and make it clear to everyone. This way everyone will know who does what and it's easier not to rely on "proximity" to solve issues
  • clearly define who in our founding team is the decision maker; this person will not be a "dictator", rather will step in when the three of you can't find a consensus so the business keeps moving forward; I guess this is commonly regarded as "CEO" nowadays.

Lastly, keep in mind at all times that you need to separate business from personal relationships.

The business goal is one and only one : to be profitable so it can fulfill its mission (whichever it is). Keep business issues in the office and personal issues at home.

answered Jun 5 '13 at 06:52
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Tomeduarte
704 points

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