They were two friends.
Met during a starter event. Built quickly. Raised faster.
It was the technological brain. He managed growth.
Together, they launched, built, jostled and sacrificed.
Today they don't speak.
The board of directors had to mediate. Legal opinions have been exchanged. The company did not survive.
What killed the startup was not the market, competition or burn.
It was the Absence of a founding agreement.
Most startups do not explode.
They smash slowly – from the inside.
In my role of Fractionary CFOI worked with more than 250 founders – some on their way to $ 10 million + increased, others pick up the pieces after a painful fallout.
And the same reason continues to emerge:
The founders avoid the structure when they are optimistic.
They need it most When things get complicated.
A founding agreement does not concern mistrust.
It is a question of protecting the company when emotions take care of decision -making.
Let me show you what it looks like.
🧨 When things are fine – greed comes into play
The product strikes PMF.
A large sheet of VC terms lands.
Income jumps. Your startup is on the map.
And suddenly:
- A founder says: “I do more, I want more equity.”
- The other says: “We agreed 50-50. It's not fair. “
- Someone suggests making a rental that threatens the role of the other.
- There is a ceiling table of $ 10 million – and no clarity on control.
I worked with a startup where the company has evolved 5x in a year.
But the founders had no clarity on decision -making rights.
No board structure. No distinction CEO / COO. No broken breakage clause.
By the chronological series A, investors fell – they could see the tension.
Growth does not cure disassertainment. Heamplifies.
When things go wrong – and blame begins
The traction slows down.
You cut wages.
A founder is still grinding days of 14 hours. The other is … no.
Now it becomes personal.
- “You are no longer engaged.”
- “I sacrificed more than you.”
- “You want to keep your capital but not present yourself.”
I saw him take place in tears, backchannel cats and conference breakdowns.
The founder who said once, “We will always discover it”, Now calls their lawyer.
No agreement = no reason to stand up.
You cannot recover equity.
You cannot reallocate decision -making rights.
You cannot delete an unperforming co-founder.
And what is worse – the team sees the cracks. Morality falls. Investors walk. Customers notice.
All becauseTwo people did not put their expectations on paper.
The Silent Killers: What the founders never speak
Here is what most of the founding duos never discuss – until it is too late:
- Who is the CEO?
- What happens if a person wants to leave?
- Can one of us start something on the side?
- Do we have to agree on each decision?
- What if one of us is exhausted?
These are not legal issues.
They are human Questions.
And when you avoid them, you create tacit expectations.
This is where resentment happens again.
I worked once with a company where the two co-founders silently assumed that they were the final decision-makers.
For 18 months, they worked in parallel.
Then they collided – hard.
The board of directors had to intervene. We left. The other has never recovered morale.
The founders do not come across the percentages. They fall perception.
“But we are friends. We trust each other. “
Each founder who already told me that meant that.
And each of them was blinded when the relationship has changed.
It was not betrayal. It was a drift.
Life has changed.
Pressure built.
Divergent perspectives.
And because nothing has been written, everything has become a debate.
A founding chord is not at the moment when things are going well.
It is your seat belt when things crash .. and they always crash somewhere.
What does that do when there is no agreement
- You negotiate roles in the middle of product delivery.
- You are talking about shares during negotiations with investors.
- You make job decisions under emotional pressure.
- You on Google “How to delete a co-founder” at 2 am.
- You whisper frustrations to your advisor instead of speaking openly to your partner.
It is not the construction of companies.
You don't need legal protection.
You need Emotional insurance.
You need something that says:
- Here we are.
- Here's how we operate.
- Here is what we agreed – in clear, calm and emotionless language.
- And here is what is happening if one of us leaves, breaks confidence or simply changes paths.
You do not write a founding chord because you think something is wrong.
You write it because if something doTHE The company deserves to survive it.
Final reflection: the agreement is not for you. It's for the company.
If your vision deserves to be built, it is worth being protected.
If your relationship is strong, it can survive difficult conversations.
If your business is developing, it needs more than chemistry – it needs clarity.
Do not wait for friction.
Do not wait for funding.
Do not wait until the resentment appears.
Write it. Sign it. Go ahead with freedom.
Because the founding agreement does not kill the momentum –
This is what allows your business to expand without collapsing.
💼 About the author
Kishore Dasaka is an authorized accountant and a fractional financial director who worked with more than 250 founders across India, Southeast Asia, the United Kingdom and the United States. It helps startups to navigate governance, financial systems and fundraising – before chaos costs them capital, trust or control.
Learn more about https://kishoredasaka.com
