do they keep their 40% equity? — any advice?

Started an LLC with my co-founder 8 months ago. 60/40 split, I'm the 60. We have a basic operating agreement from LegalZoom but I honestly don't remember what it says about leaving.

He just told me he's taking a job at Google and can't continue. The company isn't profitable yet but we have a working product and some early traction. If he walks with 40%, I'm stuck with a dead weight cap table forever.

Is there anything I can do? Does vesting exist for LLC founders?

Legally, yes, he owns the 40%. But you have negotiation leverage:

1. He probably doesn't want to be a passive minority owner in a company where his ex-cofounder makes all the decisions and can dilute him.

2. If you ever raise money, investors will ask about the cap table. A departed co-founder with 40% is a red flag — you'll have leverage to clean it up.

3. His Google job probably has conflict-of-interest policies. Holding equity in an outside company may create problems for him.

Approach him about a voluntary buyback. Offer to buy back his shares at a reasonable valuation (probably low given no revenue). Many departing founders accept 5-10% of what they originally held rather than dealing with ongoing obligations.

Ok so been on both sides of this. When I left my second startup after 6 months (health reasons), I voluntarily returned most of my equity. Kept 5% for my contributions. It was the fair thing to do.

When someone left one of my companies after a year with no vesting, I offered him a buyout at fair value (basically nothing — we were pre-revenue). He took $5,000 for his 25%. Worth it to have a clean cap table.

Have an honest conversation. If he's a decent person, he'll understand that 40% for 8 months of work isn't fair to you or the future of the company.

Alternative perspective: don't be too aggressive. If you burn the relationship, he could become an obstructionist. 40% is enough to block certain decisions in most operating agreements. Make sure you know what requires member approval vs manager approval.

Approach it as "let's figure out what's fair for both of us" not "you don't deserve this."

Good outcome. For the paperwork, make sure you:

• Get a full release of claims from both sides
• Have him resign as a manager/officer if applicable
• Update the operating agreement and membership ledger
• File any required state amendments
• Deal with tax implications (may trigger gain recognition for him)

And yes — add vesting immediately. Standard is 4-year vesting with 1-year cliff. Learn from this.

Wanted to post a one-year update for anyone who finds this thread later.

The buyback went through smoothly. Total cost was about $12K including legal fees. Former co-founder kept his 8%, we parted on good terms, and he actually helped me hire his replacement from his network.

Bigger news: we just closed a $750K pre-seed round. Clean cap table was absolutely essential — one of the VCs specifically mentioned they passed on a similar company because of "founder overhang." So the $12K investment paid for itself many times over.

Lesson learned: always vest equity. I now have 4-year vesting with 1-year cliff baked into everything.

@jurys_out_9 — I kept it focused on the future rather than blame. Something like: "We need to figure out a structure that works for where we both are now. You've got other priorities, and I need flexibility to bring on people and raise money."

I didn't involve a lawyer in the negotiation itself — that would have felt adversarial. But I did consult one beforehand to understand my options and what was realistic to ask for. Then lawyer just handled the paperwork once we had a handshake deal.

Good luck. Feel free to DM me if you want to talk through specifics.