Starting and running a business with a partner is an exciting and fulfilling journey. Co-founders can rely on each other throughout the challenges of running a business. However, one of the biggest challenges most businesses with co-founders face is the possibility of a split in the future. Starting a business requires a vision and passion that co-founders share, but as the company grows, disagreements can arise among them, eventually leading to splits. Although splits among co-founders are complex, they become necessary for the business to evolve due to frequent disagreements and failures in making necessary decisions.
In this article, we will explore the primary reasons why co-founder splits happen:
- Different goals and visions for building the business.
Co-founders might share a common vision when they start a business. However, as the business grows, its vision for where it should head can change drastically. When co-founders cannot find common ground between their different visions, they may choose to split due to conflicts that arise. Similarly, co-founders might have specific shared goals for their business, which may change as the business progresses. Co-founders’ different long-term goals become a significant reason for conflicts and split between them.
- Disagreements when making important decisions.
A business involves making necessary decisions regularly to ensure the company’s smooth sailing. Co-founders of a business might share business ideas, but their ideals and goals for the business might differ. These differences can lead to disagreements while making important decisions for the business’s progress. When these conflicts cannot be quickly resolved, they form gaps in communication and trust between the co-founders, eventually leading to splits. During such disagreements, their consequences of them are often not regarded, but they form the base of splits among co-founders in the future.
- Unequal distribution of workload and contribution.
When there are co-founders in a business, they need to contribute equally to the business and share the workload equally as well. However, co-founders might have different skills, commitment, and experience, which can lead to an unequal workload distribution among them. When one of the co-founders works more than the other, it can cause resentment and loneliness in running the business, creating heavy tension among co-founders. If they cannot find a solution to this unequal distribution, it can become a significant reason for a split in their partnership.
- Personal conflicts.
Co-founders often share a relationship beyond their business. They become great friends or even family outside of the business, which can be a great way to form a bond. However, forming a personal relationship beyond their professional relationship can also increase the chances of a conflict. When co-founders undergo personal conflicts that cannot be solved or forgotten easily, they also spill into their business and professional relationship. These conflicts are comparatively more brutal to resolve, leading to splits among the co-founders.
- Financial clashes.
Money or finance is an essential part of any business. Therefore, co-founders should have the same ideas on how to use the company’s funds. However, when co-founders differ on how they should spend the funds or how the equity should be divided, it can cause severe trouble and conflict. Since finance is such an essential part of any business, it is challenging to resolve conflicts around it, which ultimately leads to splits among co-founders.
Summing It Up:
A business with co-founders has a better chance of surviving and thriving than one founder, as it is the product of double the ideas, skills, and resources. However, it is also prone to conflict and disagreement that can negatively affect the business. So, co-founders must communicate openly and honestly about their goals, aspirations, expectations, and concerns about the business to minimize any chances of splits in the future. By identifying the primary reasons most co-founders’ splits happen, they can work together to resolve these issues and build a strong business.
