Things to do when a startup founder resigns in the middle of the road

Imagining the complexity of finding a co-founder is enough to drain your time and energy. However, have you ever imagined what the conditions would be if the founder of a startup resigned from his position? What should you do to keep the company running on track?

David Ehrenberg, CEO of Early Growth Financial Services, shares tips on the matter as summarized in an article. According to Ehrenberg, the reasons for the resignation of a founder can be various reasons. However, you need to understand that timing from resignThe founder can have a big impact on the company.

The reason for the resignation of the founder

In general, there are three reasons for the resignation of the founder:

First, resigned suddenly due to serious illness, death, or a better offer. The cause is a bit difficult to deal with because there is no previous sign.

Secondly,, withdrew due to conflict. This reason is quite common, because it can cause the relationship between founder and co-founder to be tenuous. This can result in a shift in the company's vision and mission, especially when you decide whether you want to find new investors or not.

If something like this happens, Ehrenberg suggests that you be the party that ends the cooperation in order to minimize the potential for disasters that will occur. Disagreement in running the company will happen, for that you have to prepare yourself when facing the bitterest decisions.

Third, withdrew after negotiations. When there is something that cannot be discussed further, whether it is due to work performance problems or other prolonged conflicts. You and the founder must decide the best option for the company, accept it or not. Conditions like this show whether you are both on the same track.

After you know the three causes above, imagine in your mind if there is a resignation letter that reaches your desk.

Things to do

Ada six actions what you should do immediately:

First, do plan B. There is a possibility that your company will be saved because there is a plan B that can be implemented. Even when you are facing new investors, they will need the plan. After that, you need to make the next plan as a follow-up.

According to Ehrenberg, at least in the short term, the plan you make can help the company go through the transition period after the founder "left" while figuring out what steps you should take next.

Second, consult a lawyer. You need to protect the copyright of the company after the founder resigns, starting from signing the deed of agreement and obliging not to divulge company information. Get help from a lawyer to process the whole thing. This action, at the same time minimizes all risks of legal disputes that will arise in the future.

Third, negotiate. Timing, transitions and how to handle share ownership, valuation, copyright, or other related situations are things that need to be done by agreement. You'll need the help of a lawyer to negotiate the entire process, so you don't have to deal with all of that on your own.

Fourth, complete the affairs of the company's share ownership. The last thing you want after the founder is "abandoned" is the completion of the share ownership transfer process smoothly without a complicated process. There is a process that can be considered, namely buying back (buy back) shares, speed up the schedule dressing, or other agreement.

Fifth, approach investors and creditors. Being open and transparent on the one hand is the best thing to do to minimize bad risks. Investors will also be more supportive of the company because you are more pro-active in informing the company's current conditions. Give them an idea of ​​your plan to keep the company going on track and assure them that you will take care of their money.

Finally, review your business plan. After you are left by the founder, you need to do the impact that arises from the company's business plan and finances, can it still run and? survive, or not.