After working for years in early-stage startups and as a journalist, here are three hard truths I’ve learned:
1. Success in Silicon Valley hinges on connections, hard work and luck.
2. Startups often fail because founders lack fundamental business knowledge.
3. Real, actionable advice comes from those who’ve actually done it.
There’s no such thing as “founder DNA.” If you’re willing to take on risk and invest years of your life in something that has maybe a 10% chance of paying off — less if you’re a woman or person of color — you can be a startup founder.
Here’s why I founded Fund/Build/Scale:
1. To help founders make fewer mistakes.
2. To share successful strategies that can accelerate your go-to-market journey.
3. To inspire more people to see themselves as potential founders. There’s a lot of overlooked talent out there, and we are missing out.
This podcast is for anyone who’s interested in learning the basic skills required to launch a startup, secure initial funding and transform an idea into a sustainable business.
I’m talking to guests about everything: finding a co-founder, conducting customer discovery, recruiting early employees, developing a PLG strategy, fundraising when you’re outside a major tech hub — all of it.
Interested? Subscribe to Fund/Build/Scale on all major platforms and follow the podcast on LinkedIn or Substack to get articles, excerpts, transcripts and more.
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After working for years in early-stage startups and as a journalist, here are three hard truths I’ve learned:
1. Success in Silicon Valley hinges on connections, hard work and luck.
2. Startups often fail because founders lack fundamental business knowledge.
3. Real, actionable advice comes from those who’ve actually done it.
There’s no such thing as “founder DNA.” If you’re willing to take on risk and invest years of your life in something that has maybe a 10% chance of paying off — less if you’re a woman or person of color — you can be a startup founder.
Here’s why I founded Fund/Build/Scale:
1. To help founders make fewer mistakes.
2. To share successful strategies that can accelerate your go-to-market journey.
3. To inspire more people to see themselves as potential founders. There’s a lot of overlooked talent out there, and we are missing out.
This podcast is for anyone who’s interested in learning the basic skills required to launch a startup, secure initial funding and transform an idea into a sustainable business.
I’m talking to guests about everything: finding a co-founder, conducting customer discovery, recruiting early employees, developing a PLG strategy, fundraising when you’re outside a major tech hub — all of it.
Interested? Subscribe to Fund/Build/Scale on all major platforms and follow the podcast on LinkedIn or Substack to get articles, excerpts, transcripts and more.
Dead Weight on the Cap Table: Inside the Ugly World of Founder Breakups
Fund/Build/Scale
47 minutes
2 months ago
Dead Weight on the Cap Table: Inside the Ugly World of Founder Breakups
More startups die from co-founder breakups than from running out of money.
Attorney David Siegel, a partner at Grellas Shah LLP, has spent years inside these conflicts, helping founders navigate everything from equity disputes to emotional meltdowns.
In this conversation, he explains:
Why greed and mismatched expectations trigger so many founder breakups
How minority founders can protect themselves before they’re pushed out
What departing founders can realistically expect to walk away with
Why VCs hate “dead weight” on the cap table
The emotional toll of disputes — and why lawyers often play part therapist
If you’re thinking about starting a company with someone else, or already rowing in that two-person boat, this episode will show you what’s at stake — and what to do before it’s too late.
If you thought The Social Network had a happy ending, you might want to skip this one.
RUNTIME 47:35
EPISODE BREAKDOWN
(2:15) Disclaimer: “If you're looking for legal advice, that's something to talk to your own lawyer about.”
(4:14) When it comes to equity distribution, “the fifty-fifties are a 5%.”
(7:14) What are the most common triggers that lead to co-founder breakups?
(11:35) What steps can a minority co-founder take to protect their equity in the earliest stages?
(15:23) Ultimately, “the only person the lead investor knows is the majority founder.”
(17:06) As long as you document all oral agreements, “you should be in good shape.”
(20:04) Draw up agreements for any advisors or consultants you add to the cap table.
(22:36) “The initial calls around a co-founder dispute, we play 50% lawyer, 50% therapist.”
(25:17) “Breakups where it's not a surprise to the founder being kicked out are usually the smoothest.”
(28:05) Once outside money comes in, minority co-founders leave with less than they agreed to.
(30:09) How negotiable is retaining the co-founder title after a breakup?
(32:32) Pre-agreed severance and other ideas for reducing financial pain and hard feelings.
(35:05) “What a minority founder can do: you need face time with the investor.”
(38:44) When should the founder with less equity contact a lawyer?
(41:15) The most common mistakes founders make during a breakup.
(44:43) The one thing David wishes more founders understood before picking a co-founder or investor.
LINKS
David Siegel
Grellas Shah LLP
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Thanks for listening!
– Walter.
Fund/Build/Scale
After working for years in early-stage startups and as a journalist, here are three hard truths I’ve learned:
1. Success in Silicon Valley hinges on connections, hard work and luck.
2. Startups often fail because founders lack fundamental business knowledge.
3. Real, actionable advice comes from those who’ve actually done it.
There’s no such thing as “founder DNA.” If you’re willing to take on risk and invest years of your life in something that has maybe a 10% chance of paying off — less if you’re a woman or person of color — you can be a startup founder.
Here’s why I founded Fund/Build/Scale:
1. To help founders make fewer mistakes.
2. To share successful strategies that can accelerate your go-to-market journey.
3. To inspire more people to see themselves as potential founders. There’s a lot of overlooked talent out there, and we are missing out.
This podcast is for anyone who’s interested in learning the basic skills required to launch a startup, secure initial funding and transform an idea into a sustainable business.
I’m talking to guests about everything: finding a co-founder, conducting customer discovery, recruiting early employees, developing a PLG strategy, fundraising when you’re outside a major tech hub — all of it.
Interested? Subscribe to Fund/Build/Scale on all major platforms and follow the podcast on LinkedIn or Substack to get articles, excerpts, transcripts and more.
