Where cofounder splits get stuck
Equity is usually the first fight. If shares were issued with vesting, a departing cofounder's unvested shares may be subject to repurchase, but many early companies never documented vesting, or documented it inconsistently. Intellectual property comes next: if a cofounder never signed an assignment of the work they created, the company may not clearly own its core code or brand. Deadlock is a particular risk in two-founder companies with equal ownership and equal board seats, because neither side can act alone. A cofounder dispute also puts fiduciary duties in play, since founders who serve as directors or officers owe duties to the company even while they are at odds with each other.
Documents to pull together
Collect the certificate of incorporation or formation, the bylaws or operating agreement, any stock purchase or restricted stock agreements, records of tax elections tied to vesting, IP assignment and confidentiality agreements, and the cap table. Board and shareholder consents matter as well, especially if anyone was appointed or removed. Keep your own messages, but ask before copying company files to personal accounts or locking a cofounder out of systems, since self-help steps like these often become claims in their own right.
Paths toward a separation
Many cofounder disputes resolve through a negotiated separation, typically pairing a repurchase of some or all shares with a transition of duties and mutual releases. Investors are often watching, and an unresolved fight can stall fundraising. When we first meet, we go through the documents, map who controls the board and the votes, and identify what each founder actually wants, because leverage often lies in a document one side forgot it signed. Litigation over dissolution or fiduciary duty is available in some situations, but it is expensive and public, so it is usually weighed against what a negotiated exit can achieve. If a founder has already left, check the repurchase provisions promptly, since some of those rights must be exercised within a set period after departure.
