1. START-UP PRE-NUPTIALS
AVOIDING
FOUNDER MELTDOWN
10 TOPICS TO DISCUSS FIRST
https://www.flickr.com/photos/blacktanso/

2. Fighting with your co-founders sucks

3. Yet founder meltdowns are
incredibly common in the start-up
scene

4. Heck! Facebook’s founder
squabble was so bad it become a
feature-length move called The
Social Network!

5. They typically happen about 2 or 3
years in

6. when somebody starts thinking that
somebody else is not putting in
their fair share of sweat

7. or that the strategy is just wrong

8. or life priorities are pulling you apart

9. or when the thrill is just gone

10. Whatever the case, it is almost
always emotional, irrational, and
painful

11. That’s why you should always
prepare a “prenup” for the worst,
when things are the best

12. All founder teams should have a
heart-to-heart and produce a
signed founders contract at the
outset of any venture

13. Here are 10 things that you should
discuss and agree upon before
signing

14. 0 1 SHAREHOLDING
How will we divvy up equity, assign
vesting rights, and why? Be
quantitative here. It needs to make
sense. Don’t just split it equally among
friends. You are acting on behalf of the
firm’s best interest here.

15. 0T I2ME AND PRIORITIES
How much time will each of us
explicitly commit to during years 1,
2, & 3?
What are known, acceptable other
priorities (and how will we agree to
schedule them)?

16. 0D E3LIVERABLES
What are our shared goals for the
company?
What are each of our SMART
milestones and deliverables (as
defined in a job description)? What
if one of us does not deliver?

17. 0L O4ANS & CASH INJECTION
How much $ will each of us put in?
What if we need a cash injection
from founders mid-stream? Who
pays what, how will we determine
valuation, and what happens if one
of us can’t pay?

18. 0S A5LARY
How much will everyone be paid?
What happens if we need to adjust
up or down?

19. 0R E6TIREMENT
What if one of us has an accident, wants to
leave or relocate? Needs to take another job
to survive? What if that other job is
competitive? What if it turns out that we hate
each other?
What is expected in terms of leaving? How do
we deal with shareholder loans & shares?

20. 0T IE7 BRAKING
What if we disagree on strategy or
tactics? How do we make a final
decision?

21. 0R E8ALITY CHECK
What are each of our known
strengths and weaknesses? What
are we each not prepared to do?

22. 0E X9ITS
What type of exits are we OK with?
How will we deal with the sale of
shares (see standard shareholder
agreement terms like tag-alongs,
drag-alongs, right of first refusal,
etc)?

23. 10 WORST-CASES
SCENARIOS
What is the process for dealing with
a breach of these agreements?

24. good luck

25. be honest

26. be respectful

27. listen to each other

28. But know that if you cannot
candidly discuss these
hypotheticals and agree upon
resolutions when things are good,
then something smells fishy!

29. Selena Sol asks…..
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DECK &
FOLLOW ME
(please-oh-please-oh-please-oh-please)
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selena@selenasol.com
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Please note that all content &
opinions expressed in this deck
are my own and don’t necessarily
represent the position of my
current, or any previous,
employers

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