Founder Falloff


3 min read
startups

There’s too many posts out there talking about how to find a good co-founder.

And perhaps if I had read them all, I wouldn’t be writing a post like this.

Today I want to talk about something that I’ve been referring to as “Founder Falloff”.

The situation seems to arise a few months into a project. The founders have all put a decent amount of time and maybe even some money into a project.

Everybody is gelling, project is moving along and everything seems like it’s really coming together.

Then one of the members of the founding team just… falls off.

What tends to happen is that there’s some major life event that happens and it takes the person away from the project.

Or they just got bored with things. It happens! (he says from experience ;)

Where it becomes an issue is that folks tend to just stop communicating.

If you’re effectively done with a project, let your team know that you’re done so they can stop bugging you and perhaps find somebody else to fill your shoes.

With a small team, especially where the founders are wearing multiple hats, losing a founder can easily result in a loss of 25-50% of output.

This dip in output can easily result in a loss of momentum and potentially the entire project ends up taking a nose dive.

All this because somebody couldn’t say “Hey, I’m too busy for this right now” or “Ya know, this just isn’t something I want to be working on” or whatever it is.

The sooner you let your team know that you aren’t going to be continuing the journey with them, the better.

Not sure about everybody else, but I wouldn’t be mad about things. In fact, I’d be pretty jazzed that everything was out in the open.

If you’ve ever been in this situation you know that given enough time, you start to come off like a jerk.

You’re bugging them with requests if they are a creative/producer, or you’re trying to figure out if they are scheduling sales meetings and stuff like that.

Eventually you have to become the bad guy and break up with the person.

Sometimes it’s okay. The person is fully away that they had fallen off and aren’t shocked by it. Other times, it’s a fucking mess and can escalate quite quickly with a high likelihood of losing friends.

Gets even messier when people want to lay claim to the effort they have already put into the project. Rightfully so if they had made an early impact on the project.

A great book that I read this past year on the subject of equity splits at early stage startups (reads: pre-revenue) is Slicing Pie: Funding Your Company Without Funds. There’s a ton of information on how to handle when people leave your project.

The TL;DR of the book is to track your contributions and to be fair. Fortunately, the book wasn’t too long and I do think you should read it ;)

If you are tracking individual founder’s contributions of time and money, when founder falloff occurs, their equity will start to dilute as other founders are still working on the project.

The book even outlines how to bring in new members to the project!

Have you ever had a project where you experienced founder falloff? Would love to hear about it (even if it isn’t a horror story ;)

Also, I was planning on linking to my buddy’s blog where he reviewed Slicing Pie since he recommended it to me. Unfortunately though, seems like he let his domain lapse like a chump so no linkage for him :P