Priorities change, the direction of the business shifts, and business founders find themselves at odds with each other. Conflicts can arise for countless reasons, and the resolution isn’t always apparent. Over half of startups fail, with co-founder conflict coming in among the top reasons. Founder conflict is one of the biggest causes of failed businesses, and knowing how to come to a resolution gives the business the best chance at success.

business conflict

Solutions for Business Co-Founder Conflicts

Resolve the Conflict Before It Happens

When co-founders find themselves in the middle of a conflict, they often look back and wish they’d made plans from the start. There’s excitement and hope for the future at the beginning of a business venture, meaning that co-founders breeze past the details that aren’t so much fun to deal with. However, successful businesses start with a good foundation. An operating agreement that includes details like compensation, responsibilities, and future goals will keep the business and your partnership intact. Of course, we’d all do things differently when hindsight is considered, and many business relationships start without thinking about how to resolve issues when co-founders disagree. 

Consult a Third-Party Mediation Service

Business disagreements can feel personal. Emotions are involved and co-founders may not be able to take an objective look at the situation. That’s where a mediator can prove to be an invaluable addition to the team. They have no personal stakes in the business and can hear both sides without any biases. A skilled mediator can help keep things professional to stay on track toward a resolution for the conflict. Your mediator will be able to look at the whole picture to hopefully help all co-founders find common ground and come to a solution that works for everyone. If avoiding litigation is the goal – and it often is – then consider hiring a third-party to resolve your conflict. 

End the Business Relationship

The natural conclusion to a conflict is a solution. Sometimes, though, the only solution for a business founder conflict is a buyout. A business divorce happens when there’s no agreed upon resolution for the conflict. Handling such cases is often incredibly complicated – emotions are high, compensation isn’t always clear, and such situations may have never been discussed or even contemplated. If there’s no founder’s agreement in place, the splitting of the business can become even more ambiguous. Discussing an exit strategy at the beginning of the business venture is the best way to avoid conflict down the road, but co-founders often don’t even think about the possibility of a business breakup. Sometimes two founders want to take the business in different directions, or one wants to pursue different interests. Those cases usually see the dispute end along with the business relationship of one or more founders.

Shareholder Dispute and Mediation Services in Wisconsin

When your business is going through founder conflict, a business law attorney can help you find the solutions your founding team is searching for. In the event that two or more founders want to end their business relationship, an experienced lawyer can help the disagreement end in the smoothest way possible. Atolles Law, S.C. has handled numerous cases of co-founder disputes, and we can help you too. If you’re ready to end your business relationship or need a mediator, contact Atolles today for a consultation.