Ask HN: Preventing hijacking of a startup by a single founder
1 comments
Your post is unreadable. I'm quoting you here for the benefit of other readers:
> His experience boils down to the following. He was supposed to be the money guy and would be in the background completely. In this role he paid nearly all initial expenses for the first year including bringing in a knowledgeable manager to train founder #2 who would run operations afterwards. After a few years the company was very successful but founder #2 has refused to pay any dividends or salary to founder/investor #1. This is currently in litigation and founder #2 is using the company money to bankroll the defense.
> Due to this experience founder #1 is trying to create an elaborate structure of control and is acting as an anchor on the new venture. I'm trying to find effective controls to remove the risk of 1 founder hijacking the company. Can this be done by how one sets up the articles of incorporation or corporate bylaws? Is there a better way? In general there is trust between the founders but this aspect is causing contention. How do you limit this risk?
> His experience boils down to the following. He was supposed to be the money guy and would be in the background completely. In this role he paid nearly all initial expenses for the first year including bringing in a knowledgeable manager to train founder #2 who would run operations afterwards. After a few years the company was very successful but founder #2 has refused to pay any dividends or salary to founder/investor #1. This is currently in litigation and founder #2 is using the company money to bankroll the defense.
> Due to this experience founder #1 is trying to create an elaborate structure of control and is acting as an anchor on the new venture. I'm trying to find effective controls to remove the risk of 1 founder hijacking the company. Can this be done by how one sets up the articles of incorporation or corporate bylaws? Is there a better way? In general there is trust between the founders but this aspect is causing contention. How do you limit this risk?
His experience boils down to the following. He was supposed to be the money guy and would be in the background completely. In this role he paid nearly all initial expenses for the first year including bringing in a knowledgeable manager to train founder #2 who would run operations afterwards. After a few years the company was very successful but founder #2 has refused to pay any dividends or salary to founder/investor #1. This is currently in litigation and founder #2 is using the company money to bankroll the defense.
Due to this experience founder #1 is trying to create an elaborate structure of control and is acting as an anchor on the new venture. I'm trying to find effective controls to remove the risk of 1 founder hijacking the company. Can this be done by how one sets up the articles of incorporation or corporate bylaws? Is there a better way? In general there is trust between the founders but this aspect is causing contention. How do you limit this risk? Thanks in advance!
HN reader
EDIT: Corrected formatting issue.