Article: Co-founder Relationships: Is it worth the risk?
Divorce is never easy. It’s painful, it’s expensive, it’s life-changing. And, it’s on the rise. Now, in the UK, 42% of marriages end in divorce. Interestingly, the most common years for divorce in marriage are around years seven and eight; for co-founders it’s around year four.
In reality, for a lot of people, co-founder relationships are just like marriage relationships.
Together you make a public commitment to partner with each other, you collectively invest in an expensive asset together (e.g. a house or a business). You build a family, or a team around you both for whom you are jointly accountable for. And you collectively navigate sometimes difficult new relationships together, as with your investors… and your in-laws (!).
As to that effect, when co-founders face conflict and decide to separate, it often mirrors the economic, mental and emotional toil experienced in the breakdown of marriages.
Co-founder divorce is the formal separation of two or more people who have started a business together. Within year one of the business, 10% of co-founders go their separate ways.
This comparison of a business partnership with a life relationship is articulated here by a co-founder in our community:
“At the end of the day, it all comes down to values. If the fundamentals aren’t right, all the effort that goes into making the business a success means nothing. Looking back, I wish I'd had the strength to say no to many things and to stand up for things I felt strongly about, even if these conversations would have been more difficult.
“But very much like in a romantic relationship you keep quiet because you think it will go away, it will sort itself out or it’s not that important. And then it comes back to bite you. I learned a lot coming out of my last business and I am trying to apply these learnings to my new ventures. I also am more discerning with new people I choose to get into business.”
Thriving business partnerships should look to mirror the features which make a successful marriage, such as:
Communicating effectively – making your needs known to your partner, and articulating issues at an early stage
Compassion – for the other’s well being and for fostering a healthy, trusting partnership
Talking about money – financial woes are one of the biggest stressors on relationships, personal and business. Taking a statistic from marriage – the likelihood of divorce goes up by 45% when a spouse feels that their money is being spent foolishly by the other. Being transparent with how you manage money is critical
Separation is unique to each case, one entrepreneur we interviewed reflected on their experience with co-founder divorce:
“Initially, you get together to build a legacy - a business that will last forever and ever. But then the cracks start appearing, or maybe they have been there for a long time. You see that your co-founder is no longer adding any value and really only using the place for the title and for the PR.
You’re left thinking what do you do? How do you approach the conversation with them? Because if you don't, the business will be impacted. In fact, it already is impacted. Everyone knows there is an issue but no one is willing to discuss it. It is now impacting the culture of the organisation. If the co-founder can get away without doing any work, then why should everyone exert themselves?
Any discussion with the co-founder automatically leads to a deep fissure. The trust is broken. Every conversation very quickly becomes political and very toxic. A long term friendship is lost. The emotional impact on the individuals and the wider organisation is significant.
In hindsight, the issues were apparent very early on. They should have been dealt with and addressed with them then. Maybe that could have resulted in the company taking a very different trajectory and maybe the business still then would have failed, but it would have been better than to have waited until the situation became unresolvable.”
Co-founder divorce can happen for many reasons, and many times it’s due to a combination of things. Some of the more common reasons, which will resonate with anyone who has experienced a break-up - romantic or professional, are:
Personality Clashes
Business Goals no longer in sync with one another
One partner is more committed to the business than the other
Earlier this year, we invited Monique Baars, founder and CEO of Fineazy, to share her distressing experience of co-founder divorce on an episode of NAKED by The Future Farm.
Monique Baars did everything by the book, methodically choosing a co-founder who would elevate her business to the next level. Similarly to a romantic relationship, the early days of co-founder dating through the honeymoon period was fantastic, but soon the cracks began to appear. The toxicity in the relationship was fully submerging; her personal and professional life suffered. So began an extremely painful and emotionally draining separation process.
So the question then remains, how do we mitigate such risks?
The key is to focus on preventing conflict, rather than trying to fix it when a lot of the mental, emotional and financial damage is done.
One founder in our community offered their insight into preventative measures:
“After having several co-founder conflict situations in previous businesses, with my current co-founders we have decided to spend some quality time, at the initial phase of building our business, on defying a so-called “co-founder marriage agreement”.
At first, we tried to think of and identify all possible risks that we might face once the business is more developed. We shared those with each other, documented those and then collectively discussed different ways to mitigate and prevent those risks from happening. Of course you can’t prevent all kinds of scenarios but we also discussed what is the process to move ahead and help us resolve such situations when it happens. For instance, we agreed on using a third-party mitigation if we fail to navigate through the conflict situation ourselves.
This gives us some grounds and compass that we all agree on in advance that can then guide us through more emotionally challenging moments.”
So could co-founding a business be worth the risk? Or maybe the better question is, are marriages worth the risk of divorce?
Your Resources:
Below are a collection of tools and resources to learn more about the topic and to support you with through the unfortunate circumstances of co-founder divorce:
Reading:
Talking to Strangers: What We Should Know about the People We Don’t Know by Malcolm Gladwell
How to Fix the Co-Founder Fights You’re Sick of Having — Lessons from Couples Therapist by Esther Perel
Podcasts:
The Tim Ferriss Show with Brené Brown: Striving versus Self-Acceptance, Saving Marriages, and More
Tools:
Here is a checklist on how to break up with co-founder
Become a contributor and engage with The Future Farm
Are you interested in contributing on the topic of entrepreneur health and emotional resilience with us? Or interested in inviting The Future Farm to contribute to your initiatives or event? Drop us a note.
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