Cofounder Breakups Are Becoming Slightly More Common

Of course your startup cofounder won't leave. Definitely not.

But for other founding teams, it's a risk to be seriously considered - and it looks like cofounder breakups are becoming a bit more common in recent years.

Here's the data:

We looked at 76,978 founders that started companies between 2016 and 2024 (excluded solo-founded companies in this analysis).

These companies had to have:

a) been started in the US and b) raised at least some VC or angel cash (SAFEs or Notes count)

Each founding year vintage moves left to right—for example, in the 2017 cohort, 20.3% of companies had lost a founder by year 4.

𝗙𝗶𝗻𝗱𝗶𝗻𝗴𝘀 / 𝗠𝘂𝘀𝗶𝗻𝗴𝘀

• A higher share of startups founded in recent years had lost a cofounder in the early going (first 1-3 years).

• Is that increase in cofounder departures due to some underlying change in company structure - or is it just a reflection of the difficult fundraising environment post 2021?

• Typically founders have a 4-year vest on their shares. That means that about a quarter of founders will leave before their vest is complete (although it may be a higher if the vest didn't begin until the first VC round).

Obviously every founder should have a vesting schedule on their equity, absolute must-have. But the question of vesting schedule length has come up more frequently of late.

Should founder vesting start at 6 years given how long building a VC-backed business takes these days? Or should founders stick to the traditional 4-year vest?

No surprise that VCs would argue for the former but I think it's a pretty reasonable position. Founders can equally reasonably push back by saying if the VCs want us vested longer that should be a negotiating point during the deal.

Which brings us right back to the top and the most crucial question in your company: who are you building it with?

#startups #founders #cofounders #foundingteam #vestingschedule

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