Literally just say that to them. You said they're a close friend, so you should be able to start off with a frank and reasonable discussion about it without beating around the bush. If you somehow can't come to an understanding, then involve a lawyer.

Honestly if I were in your position, I'd be more worried that my close friend and co-founder is already planning to marry someone that they've only been in a relationship with for less than a month. But maybe I'm just ignorant of their culture.

This. Not to mention any type of drama this may continue to bring into the workplace.

Yeah, this is very unusual and could indicate some other "issues" (love-bombing? both sides simply being well-natured but immature?)

Second, your co-founder wants to grant co-founder status to his girlfriend. That seems like an odd request. I think I'd be uncomfortable with this even if it was my best friend and he'd been married to his wife for over a decade. There's plenty of things that can go wrong in a startup to begin with, no need to add the possibility of divorce and other relationship issues to the mix.

Finally, they "often reach consensus without involving me in the preliminary discussions"? That's very odd, assuming that you and your friend have roughly equal shares of equity. I personally would shy away from partnering with two romantically involved people, but at the very least, I'd want to feel like I'm not being crowded out and having decisions made behind my back.

Worst case scenario, you piss off the incumbent employees (which could cause them to go elsewhere, where their contributions are respected, and further down the line you wield no power as it's 2 of them vs you.

You need to be steadfast in your resolve, and have a private conversation with your friend and cofounder talking about these things. Stressing that although love is a beautiful thing, it's not always permanent and to focus on yourself, and what you've built first. It does sound like she has been contributing, but adding her as a co-founder with equity like that, is just his pants speaking.

Draw boundaries, and stand tall. Propose the following, if he wants her to have equity.. maybe he can sequester some of his to her? After all, they're gonna be married soon right :^)?

This seems rather quick.

Would you hire her at 10% if she weren't sleeping with a co-founder? You could suggest to your co-founder that he give her some of his equity.

As other said, he doesn't just want to give 10%, he wants you to give 5%.

Getting a cofounder is like getting into a marriage, you should be able to discuss this with your cofounder and explain plainly the issues you're seeing.

Another way of framing this is that the co-founder wants OP to just grant him control of the company by switching from the original 50-50 arrangement to a 45-55 arrangement.

It sounds like even without the 10%, this already creates an unfair (harassment?) environment for other team members. Even without equity being assigned, the message to your team is "if you manage to become a serious romantic partner or fiancee of one of the founders, you get greater influence and involvement in making important decisions."

If the marriage is actually going to happen, one of them should work elsewhere. Possibly already enough damage has been done, and one of them should work elsewhere. If their relationship is strong, it will still be strong if they're not also co-founders. If their marriage is going to last the test of time, they may be better off not having both their careers in one company basket. And team members should not need to constantly second guess whether their advancement is dependent on their work or the degree of intimacy of their relationship with their founders.

OP: 45%

Partner: 35%

Partner's wife: 10%

Team: 10%.

That way the balance remains equal and the team has the final call when there is a deadlock.

There is no way for this to go forward without creating problems for everyone. You need to talk to your cofounder about the long run issues they are going to create.

You do need to think carefully about what a breakup would look like. Relationships can go sour and if that happened what would the arrangement be if they couldn't work together.

Also, who makes the decisions? Does her allocation give them both a majority of voting rights?

It's not a typical arrangement, that doesn't mean it can't work but your co-founder has added complexity into the process.

Regardless of what you do, make sure there is a vesting schedule in place (e.g. a 4 year vest + 1 year cliff).

get a lawyer.

While not in a business, here's my experience:

When I was young, I rented a house with what I thought were good friends. One friend wanted to bring his gf. We were friends, so I said sure. Turns out, both couples alienated me beyond my comprehension. They weren't mean, I just didn't exist as they tended to each other.

One couple I stayed friends with, the second didn't fare so well.

The moral of my story is that the dynamics will change, and you are the odd one out. Best of luck!

If she’s supposed to be part of your founding team, this is something you should be able to work through.

If you can’t come to an agreement, be glad you found out now rather than in a year or two

1) Having a relationship with a subordinate is not normal today. Planning to marry a subordinate that one has been dating for only a few weeks isn't normal at all. Your co-founder's behavior with a new employee opens your company up to harassment lawsuits by his fiance if the relationship fails, and by other employees whatever happens to that relationship.

2) Being a co-founder wouldn't give her the right to make decisions for the company. It's a label, not a meaningful legal title.

3) She is not a co-founder and should not be made one if the business already exists as a legal entity. You can consider bringing her on a a high-level employee/executive, since it sounds like she has already done executive-level tasks like bringing in partnerships, but that is something you need to discuss with a lawyer.

3) Your co-founder and fiance already making decisions without you is a huge red flag, and it is likely that after they marry they will formally push you out of the company. She is not a co-founder, or executive, or even a long-term employee. She's literally someone he met a few weeks ago. She shouldn't be involved in decision-making at all.

* Have y'all formed a corporation already? * What sort of equity split did you decide in the early days and do you have it in writing? * Did you have equity splits for the other students that helped?

It's probably best to work through an equity conversation for everyone whose contributed and not treat your friend's wife as a special case. If indeed, her contribution was significantly more, then it would make sense for her to have more equity than others once you establish the company, if you haven't already. Also note, that if you don't already have a vesting schedule you should institute one, not only for yourself but all the employees. You can potentially backdate that to the "start date" for each individual.

As for founder status, if you do end up determining that her fair equity split is significant portion of the company, it may be warranted.

All of the above probably requires a lawyer to do incorporation, write equity vesting policy, etc.

They all were smart and nice and capable and experienced, and I was leaning towards joining. Though I was a little wary that they were all friends and I'd probably be a non-founder, and aware that usually a couple-like imbalance of power/relationship among the co-founders can be tricky. (I've seen this in detail elsewhere.)

(Relevant background: I'm probably best right now as a technical cofounder who'd solo build the MVP software and infra, and then switch to building&leading engineering as the company grows. But I was also open to being a founding engineer, with the right team and arrangement.)

After the good meetings with the team, for further diligence, I had an extended one-on-one with the third person, on what they'd already built, architecture, and their roadmap for the next year or so, and also to get more familiar with each other.

After talking, I indicated that it looked like the third fo-co-founder had everything covered, and didn't actually need me. Then this third co-founder was speaking more candidly, and indicated that they wanted to herd junior developers to do what remained. My impression was that the co-founders weren't in-sync on hiring someone like me, so I decided to leave things at letting the co-founders regroup.

Speculation: Since I'd found them through a strong personal referral, it might've been a "hire of opportunity", rather than a kind of hiring they'd all decided beforehand that they needed right now. And if the referral came in through a contact of the couple co-founders, it's possible that was an edge case in which a dynamic of two co-founders who're especially close -- no matter how conscientious -- might've inadvertently resulted in the third co-founder having been less in the loop in that instance, and railroaded by circumstances.

I think that particular exceptionally good team will figure out whatever comes their way. But startups are all about learning, and there will be learning opportunities even around things you know and had handled.

They've been seeing each other for less than a month? And he wants to marry her and give her 10% of the company you've been spending 4 years to build, half of it coming from you?

Do you realize the lack of judgment of that person? Do you realize that he's ready to screw you over for a girl he met 4 weeks ago. Do you really want to have him involved in high level decisions regarding your own future.

The answer is obviously no to you giving away anything. If I were you, I'd keep my equity stake as it is and run and do something else!

Life is short, and things can be rebuilt. These are MASSIVE red flags that scream that you shouldn't start a business with that person. This whole thing is going to blow up bad at some point, it's so painfully obvious. It might as well be now than in 2 years.

Ugh, sorry about this. This is painful.

Turned it down once I figured out that I would no longer be a controlling owner.

Caveat: pay attention to the backend deals and overall picture.

There have been cases of married co-founders working out great for everybody. Diane Greene and Mendel Rosenbaum at VMware are a nice example. [0]

[0] https://en.wikipedia.org/wiki/Diane_Greene

Work out what drama is acceptable to you and work towards that. This will get ugly.

Your partner clearly makes quick penis driven decisions for good own benefit. This can’t work.

There are a few principles that I think can be helpful here:

1. The vast, vast majority of work remains to be done, and the vast majority of value your startup will have has not yet accreted. Unless your startup depends on some like critical patent or something I'd wager that 90%+ of the value is yet to be created.

2. At exit, a person's equity ownership in the startup should be roughly proportional to how much they value they helped accrete over the life of the company.

3. The above is the only thing that matters. Opportunity cost, professional reputation, relationship status, prior experience—all of those are irrelevant. The only thing that matters is contribution to the value accumulated by the startup over its lifetime.

Unfortunately, most big equity decisions are taken at the beginning of a company's life, not at the end--where most of the information needed is not known!

Because of that, no matter what you do, you will probably end up with something that is significantly far from optimal. There's just not enough information. Tough luck, them's the breaks, that's the price of success.

However, there are a few things you can do now to help guide the process:

1. Agree, explicitly, to the above principles. That is key.

2. Agree, explicitly, to everyone's role and responsibilities over the next year.

3. Given the above, distribute equity in a way that is simple, broadly aligned with the stated principles, and probably over-indexing on "fairness" than accuracy. It's better to make other people a bit richer than they "deserved" and be happy than the opposite.

4. Make sure that everyone's equity has a vesting schedule. The longer the better. 4 years is standard but honestly a bit too short when in the current world startups exit after 10+ years.

5. So that might look (at very first approximation) like you and your cofounder starting with 35% each and your new cofounder with 30%, or 40-40-20, or something like that.

5. Get to work.

Good luck!

I would suggest that unless she is bringing unique talents to the team, she would not get cofounder status and anywhere near that amount of equity — especially if others have been laboring away without so much equity.

If you do give any equity, make sure it's on a vesting schedule, and with the usual 1 year cliff. Then make sure that you have the power to dismiss her without needing your cofounder's vote. Obviously he has a conflict of interest and would be hard pressed to fire his wife (and have them lose equity as a couple).

You can frame this as a general rule that anyone with a conflict of interest does not vote on such matters. This honestly would also protect her in the event that she contributes a lot to the business but has a falling out with your cofounder. She wouldn't want him to be able to fire her out of spite.

If you are 50/50, you should create a milestone plan. After the milestones are hit, she begins vesting.

Another way to look at this involvement: Imagine you hired a consultant do some work for you and they made significant contributions, connected you with some companies, and formed some partnership. Does that person merit the same benefit?

If the issue is pushed further, I'd strongly recommend talking to a lawyer privately. And make sure that lawyer represents your interests and the company's interests.

If the only reason she is being given cofounder status and all this equity is because they are banging and your friend is horny, you either need to step in and tell them no or leave.

I am concerned that two of your cofounders are engaged in a new romantic relationship. The fact that they are already talking about marriage says a lot about how unseriously they are taking everything.

No, no!! And if you think again, no!!

I saw ruined my dreamed company because almost the same situation (co founder flirting and engaging with a worker), everything was destroyed then.

It took me 2 years to recover from depression and then I had no company, no friend and no workers.

NFW!!

Make it clear any equity to the wife will come from her husband.

What about the fact that within a month someone new could contribute so significantly to your years-long business as to be worth 10% of it? That would make me ask a lot of questions about the value of the business and the value of everyone's contributions to it.

Just be firm and say NO. Be professional about it. Get a Lawyer and be prepared.

Prioritize the company over this personal drama.

If she is indeed proving to be worth 10%, and contributing to an exponential growth then give it time and assess the situation in an year.

> 112. My co-founder wants to bring his wife as a late joining co-founder | 42 points by HaowenJohnWei 1 hour ago | unvote | flag | hide | 53 comments

The person in question joined the group a month ago and the “plan to marry” happened after that, according to the OP.

This isn’t a long term, trusted friend. It’s someone who showed up a matter of weeks ago.

Also, in this case the OP mentions that they are already making decisions without him. If you've had a co-founder for years, there is no world in which it's OK to make decisions without them with someone you met 1 month ago.

You don't even need to factor in the personal relationship for this to be sketchy.

Why stop at 10% ?

It sounds like the two of them want to have a majority position to be able to make decisions without you.

I would maybe be more gentle, but not saying a version of this will hide the biggest issue, which is the blatant nepotism.

I personally wouldn't accept it, it dilutes your team's equity and opens up a huge can of worms around conflict resolution, and founder conflicts kill companies. I would think of this as-if your cofounder is asking for an additional 10% on his or her stake, because that's de facto what it's going to be. Your cofounder frankly also hardly knows this woman despite the fact that he or she rushed into marriage.