I am involved in a pre-seed project with another person. When I started this project I was looking for a person who I thought would take care of the administrative and executive tasks of the company while I handled the technology and finances. I found my cofounder, Adam, because I thought he was this kind of person.

I didn't really know Adam when I agreed to start this project with him. As I've worked with him for 3 months I've realized that for the project to succeed, it will be without him as cofounder. When we started to build the product, it went how I thought it would. However, as time went on Adam started wanting to be a more of a developer, even though he had no developer experience. We built a product together that was horrible and hacked together because half of my time was spent mentoring him and fixing his code.

It's obvious to me now that what he wants to do is different than what I wanted him for. I've built a new product from scratch, completely myself, and I've stopped pushing code because I'm frankly afraid of his drag on it and I work much more quickly without him. I know that he doesn't think long-term enough to take the company where I want to take it. Essentially, I was looking for a CEO and I see now that he is not fit to be CEO of this company. I own everything and I have to do everything myself. I own the domain, the email inboxes, the code for the landing page, the product, and all the labor that has gone into this new version. I do not know why I'm continuing to allow him to be take credit. However, I know that he feels ownership of the idea since we formed the idea together and this is the only leverage he has.

Basically the way I see it I have 3 paths: 1) Act like everything is cheery and let him take 50% of a company that I built and own. I allow him to take CEO role and I am unhappy. 2) Reduce him to a minority position, around 20%. This is basically just a consolation prize, because he was around and provided "moral support" through the first iteration cycle of a failed product. I don't even know what his role will become, maybe "community manager." 3) Separate from him. Basically tell him that he is no longer involved in the project. The project is mine, I own the assets and built the product. We don't sign a non-compete and he can take my code once I publish it and fork the project if he wants. I don't care.

Overall my largest dilemma is that I know he's bad at organizing work priorities, has personal weaknesses that makes him a bad leader, doesn't engage in the same form of long-term thinking that I do, lacks overall project vision that is ambitious enough, and requires a lot of nurturing from my end. I've changed my mind about wanting him involved.

What can I do?

Am I being sociopathic / anti-social by thinking all this?

EDIT: No legal contracts, verbal commitments and emails up to this point has made clear we plan to split equity 50 - 50 in the case that an entity was formed. Locale is the EU.

EDIT2: I added the "unlucky" descriptor because he went broke 1 month into the project because he had mismanaged his personal finances. I did not know this at the time. It was overall detrimental to the project since it put an unnecessary burden on us to raise funds before we had reached the right maturity to do so. Because of this, I've also been working full-time on this while he's taken a 30/hr week job at another startup. He was supposed to continue working but all he's done for the last week has been send some emails.

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    What you need is a lawyer – solarflare Feb 5 at 1:55
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    Have you talked to him about this? – Mawg says reinstate Monica Feb 5 at 8:07
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    What's the likelihood that he'd say similar things about you? I could well imagine a similar anonymous post popping up discussing the same conflict from the other side. – Tom W Feb 5 at 9:49
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    If he mismanaged his personal finances, that's not being "unlucky". That's a "stay away from the company's finances" kind of person. – ChatterOne Feb 5 at 11:59
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    Let's say you do this and then a few years go by and your company is now profitable and has some new investors. Your old co-founder finds out about the good fortune (from LinkedIn for example) and, being in poor financial condition, sues you for their 50%. While you think the lawsuit is baseless, they present those old emails to your current investors who become VERY upset. Your new investors might sue you too, if only to protect their investment (their lawyers might advise this course of action even if they aren't upset). – Glen Pierce Feb 5 at 15:58

No legal contracts, verbal commitments and emails up to this point has made clear we plan to split equity 50 - 50 in the case that an entity was formed.

That's why you should always have a contract before you start investing time and money into a business partnership. A proper contract would explain exactly what to do if one of you wants out. It would also have outlined what each of your obligations are, and what happens when one of you doesn't fulfill theirs.

But without a written contract this is a really messy situation. You both might or might not have claim to any intelectual, physical and capital property of the company. Finding out the details would be a job for lawyers and judges.

Verbal contracts can be binding contracts. But the problem with verbal contracts is that they aren't worth the paper they are written on, because both sides might disagree about what they actually agreed on. However, your email correspondence might prove what your original deal was and might be used to reconstruct what you agreed on. Get a lawyer to look at these and tell you if anything in there could constitute a valid business agreement between you and him which he might have broken.

But if that's too stressful and too expensive, you might also consider another option: Just tell Adam "I quit!" and break contact. Leave everything behind and start a new business from scratch. Let him keep the rights to the software if he wants to - if he is really as inept as you claim there isn't much he can do with it anyway. And in case you misjudged him and he does turn it around and make it successful, it's far more in his interest to resolve the messy copyright situation than in yours.

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    +1 for that last paragraph, that would be the best course of action for OP. – trashpanda Feb 5 at 9:56
  • Sure, the final paragraph here is totally correct. – Fattie Feb 5 at 13:10
  • If you go and write a new piece of software based on the old code, the intellectual property issues might be yours to solve someday. – Glen Pierce Feb 5 at 16:00
  • @GlenPierce That's what I meant with "Leave everything behind and start a new business from scratch". – Philipp Feb 5 at 16:02
  • @GlenPierce That's worth asking a lawyer about. – David Thornley Feb 5 at 16:55

So you disagree over the direction your company should go. Adam thinks mom&pop's homemade software, you think Momcorp inc.

So one of you needs to change course because as co-founders you have equal rights to the direction of the corporation.

So don't tell them to get out, persuade. Its your choice what way to approach this but think of it more as a relationship than a company.

Lets take an example: You want to move to the other side of the country, your SO does not. there are reasons to move, there are reasons to stay. You can try convince each other but if neither sways then the only other option is breaking up the relationship.

Of course a breakup is messy: who gets the house, who gets the cat? you'll have to figure those things out and this is where you'd get yourself a lawyer because the house of software is the propery of you both, even if your SO only hung up some paintings and moved the sofa.

  • The final paragraph only applies to a real, actual business endeavour. What we have here is just some talk; the OP will simply walk away and say "Bye". – Fattie Feb 5 at 13:10
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    "Just some talk" can still have value. Facebook paid $65m to someone who claimed to have come up with the original idea. theguardian.com/technology/2009/feb/12/… – thelem Feb 5 at 14:20
  • There is code, there is written communication, there is enough of a verbal contract to talk of a co-founder: all those things mean there is enough of a business that the legal situation gets very, very muddy. – Borgh Feb 5 at 15:15
  • The first line of your post is exactly spot on actually. The rest of it tapers off topic. – voltair2 Feb 5 at 15:27

The answer here is dead simple.

Politely tell Adam the project is off, and then have no further communication.

It would be absurd to have any association with someone who is wholly useless. (We can only take your description at face value.)

You made a big mistake - learn from it!

Regarding the mistake at hand, terminate it today. Life is short.

(If, incredibly, Adam asks "why" then state ten words, "Your technical and business skills don't meet what I'm looking for.")

(If you are unable to state directly such things, set aside the idea of starting a product or company.}

  • heh - "Your technical and business skills don't meet what I'm looking for." – Fattie Feb 5 at 21:31
  • They are actually 13 words. Unlucky. – ypercubeᵀᴹ Feb 6 at 12:25
  • Guys, it was funny - good one - let's not get in to a detailed discussion! :) – Fattie Feb 7 at 15:05
  • @JoeStrazzere you are saying that "I'm" and "don't" are one word? I never thought so. – ypercubeᵀᴹ Feb 7 at 15:09

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