When to drop a co-founder?

There are some excellent posts on how to select a co-founder and what qualities you should look for. I firmly believe in 'try it out', and have been for about 5 months. In that time I've also come to believe that the intense start-up partnership is indeed 'like a marriage', although it may be unfair for me to slander marriage without giving it a try first.

I don't need to tell readers here that the requisite levels of day-to-day communication, agreement, and coordination are nothing like the corporate workplace. Some conflict is unavoidable, and disagreements have the potential to get personal in such a high-intensity environment.

While there's certainly some subjectivity in the question there is room for concrete answers. What are the tell-tale signs a partnership isn't meant to be?

What problems are big enough to warrant dissolving the partnership rather than working on the problem?

Yeah the key bit is to get in the agreement early what the KPIs are going to be.

1. When nothing moves on their side continously between meetings.
2. When you can't agree on the direction of the company.
3. When you aren't spending the majoirty of your time together, and it isn't because sales are pulling you apart.
4. When everything else is more important.
5. When all the work is on one person.

An arguement and disagreement is fine as long as you can keep going afterwards.

And the big one: When you don't want to do it anymore and it stops being a shared goal. (over 3-6 months not just some random day that was bad)

Very similar points, just expressed a different way:

One feels and acts like they're in charge (in an equal partnership/split)

When you dread their number coming up on caller ID

When one doesn't want to deviate from the "dream" when the market is telling you loud and clear to change direction

When a job starts to seem desirable

When you have to leave the office for an hour after meetings

Great question. My feeling is that when you sense they will not be an A (or event B) player in the project.

That said, there is nothing like having amazing co-founders so before you drop people, realize they are people and human beings, and try to find out why they are not performing. Don't become a psychologist, but make sure they have what they need to get on the path to being successful and productive. :)

Also, bad partners can kill your startup, so if they are very bad, run for the hills ASAP. :)

If you take risk capital from investors, all founders should agree with the exit strategy of the investment companies.

What happens is that all investors have exit strategies. Usually is whatever gets their invested money back multiplied by a large factor.

Investment companies have a timeout to execute an exit strategy, say 7 years. Often, they want to sell their share. However it is very common that they find a buyer that not only wants their share, but also wants the whole companies shares, including the shares of the founders.

It is not uncommmon for founders to disagree on whether they should sell the whole company or not.

If you have taken risk capital, make sure you agree with your co-founder about these consequences.

If you have not taken risk capital, your company may not grow fast enough and your or your co-founder may get frustrated with that decision. Make sure your co-founder is inline with your thoughts about not taking risk capital.

It has happened to me. It is personal so maybe I should ask for permission before posting this, so I will try to be general.

1. Early on decide who can drop whom and why/how. Just a five minutes talk. Do not discuss of a divorce before the wedding, but you need to know who stays and who goes when things go wrong. An example: I was "technical", the co-founder had domain knowledge, a company could move with another technical person, but not without a domain expert, so the person-out would have to be me.
2. Try to bring up signals early on in time to avoid it. If suddenly one day 20 issues come to the table from many co-founders it will be difficult to solve them. If they got solved one by one, perhaps they do not need to separate ways.
3. Do it in a nice way, people should get out of this with minimum anger, else things will break. What if you make your co-founder so angry with you that he will call all your client base and try to acquire them as customers?

Generally I would say that this is the last resort, but when it is inevitable, it has to be done in a fast and gentle way.