We are facing founder conflict at a startup. As we are growing a lot of turmoil is arising in the company. We were a very close knit group when we started – 6 batchmates from IITK. But now there is too much politics. Our board is making big demands but two of the founding team are just not responding well or executing. We are spending too much time redoing their work instead of doing important things. They have equal shareholding in the company but more important than that, we are friends who have shared a dream from 12th standard. What is the best way to handle this situation?

Answered by Meeta Malhotra

This is a tough situation and if it’s any consolation, a fairly common one. The truth is that as a company grows, the team that was right for it at an early stage may not be the best team to handle the pressures of scale.  This is my advice:

  1. Take one of your board members into confidence and discuss your organization structure with them.
  2. Separate shareholding from roles. You need to put the best person for the job in a role, and this may not be one of your co-founders. Discuss what other roles, if any, that they could be moved to.
  3. Understand that as a founder you have a commitment to your company, its employees and investors. You cannot sacrifice this because you do not want to have a tough conversation with your friends.

You need to make some painful decisions and the sooner you do it the better. The longer this festers, the harder it becomes for everyone.

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