Cofounder left after 8 months, wants full 25% equity - no vesting agreement

I'm so frustrated I could scream. My cofounder and I started this company in April. We agreed on 75/25 split (I put in the initial capital, he was bringing technical skills). We shook hands on "4 year vesting" but never actually wrote it down.

Well, he just told me he's leaving. Got a job offer he "can't refuse." Fine. But now he's saying he owns 25% of the company outright and wants to keep it.

We have an LLC operating agreement from a template but I just checked and there's nothing about vesting in there. The 25% was just assigned to him as a member.

Please tell me there's something I can do here. I can't have someone who worked 8 months owning a quarter of my company forever.

I'll be honest with you: this is a very common and very painful situation. The bad news first.

If your operating agreement assigns him 25% membership interest with no vesting provisions, he legally owns that 25% right now. A verbal agreement to vest "someday" is going to be extremely difficult to enforce, especially if he denies it or remembers it differently.

Your options:

• Negotiate a voluntary buyback — Most realistic. Appeal to fairness, future problems for him (tax obligations, liability exposure, investor issues), offer a small cash buyout
• Document the verbal agreement — Do you have ANY texts, emails, Slack messages where vesting was discussed? Even "we should get that vesting thing written up" would help
• Litigate — Expensive ($30-50K+), uncertain outcome, could take a year. Only worth it if you have strong evidence of the verbal agreement

For future reference: ALWAYS put vesting in writing before anyone gets equity. This is startup 101 and it's a lesson that costs founders millions every year.

Investor here. Let me tell you what this looks like from our side.

If you come to me for seed funding with a departed cofounder holding 25% of the company, I'm going to ask questions. If you tell me there's no vesting and the relationship ended badly, I'm probably passing. The risk of future drama, lawsuits, or blocked decisions is too high.

BUT — this gives you leverage. Tell him: "If I can't raise money because of your 25%, the company fails and your shares are worth zero. Work with me here."

Most departed cofounders will take a buyout (even a small one) rather than hold dead equity in a company that can never raise or exit.

had the exact same thing happen to me in 2021. cofounder left after 5 months, wanted his 30%.

what worked: I offered him 5% (roughly what he would have earned with proper vesting) plus $3,000 cash. he pushed back at first but I pointed out that (1) he'd have to file taxes on his share of company income/loss every year, (2) he'd be personally liable as a member if anything went wrong, and (3) nobody was going to buy his shares anyway.

took 2 weeks of back and forth but he signed. get a lawyer to draft the buyout agreement tho, its worth the $1-2K

Before anyone lawyers up, consider mediation. Seriously.

Cofounder disputes are emotional and people dig in when they feel attacked. A neutral mediator can help both of you see the practical reality without the adversarial dynamic.

Cost is usually $2-5K for a half-day session, way cheaper than litigation. And you're more likely to get a deal both parties can live with.

JAMS and AAA both offer startup-focused mediation. Some local bar associations have programs too.

idk why people are still making this mistake in 2025. always. get. it. in. writing.

like even a napkin with "75/25 split, 4yr vest, 1yr cliff" signed by both would be better than nothing

sorry ur going thru this tho. hope it works out

Thanks everyone. Found one text message from May where I said "we should get the vesting docs done this month" and he replied "yeah for sure, 4 years right?" So at least there's something.

Going to try the negotiation approach first. Offering him 5% plus a small cash payment. Will mention the investor angle and the ongoing tax/liability stuff.

If that doesn't work I'll look into mediation before going nuclear with lawyers.

@HardTruth_Sally yeah I know. Lesson learned the hard way. Already have a lawyer drafting proper vesting provisions for the operating agreement in case I ever bring on another cofounder or early employees.

That text message is actually really helpful. "4 years right?" shows he understood and agreed to vesting in principle. Keep that screenshot in a safe place.

For the negotiation, I'd also point out that as a 25% member he'd need to approve major company decisions in most LLC operating agreements. Does he really want to be getting calls about signing resolutions for the next decade? Most people don't.

Good luck. And yes — get proper docs in place for the future. Standard founder vesting is 4 years with 1-year cliff. Worth the $2-3K to have a lawyer draft it properly.