You're doing 60 hours a week. They're doing six. The cap table still says 50/50.
Type "cofounder not working but owns half the company" into any search bar and you get a hundred forum threads with a hundred anecdotes and no sequence to follow. So here's the sequence, and here's the fork it leads to. You either renegotiate the equity while your cofounder stays involved, or you buy them out and run the company alone. Call them the Re-Vest and the Buyout. Both work. They work in different situations, and choosing wrong costs you a year you don't have.
One piece of context before the fork. Noam Wasserman's research in The Founder's Dilemmas (Princeton University Press, 2012) attributes 65% of failures among high-potential startups to conflict among the founding team. The same research found roughly 73% of teams split equity within the first month, before anyone knows who will still be around in year three. If your split was decided over beers in week two, it was a guess about the future. Guesses get revised. That's not a betrayal, it's arithmetic.
Before you propose anything, document the contribution gap
Write down what each of you actually did over the last eight weeks, in numbers, with no adjectives. You cannot negotiate equity off a feeling, and the moment you open with "you're not pulling your weight" you've handed your cofounder a debate about character instead of a conversation about workload.
What goes in the document: hours logged or calendar hours booked, commits merged, customer calls taken, deals closed, standups attended, decisions made without them because they weren't reachable. One page. Two columns. Dates.
Say your cofounder is called Marcus. The line that changes the room is not "you've checked out." It's this: "In September and October I took 68 customer calls. You took four. I merged 112 pull requests, you merged nine. I've made eleven pricing and hiring decisions alone because you were unreachable for more than 48 hours." Marcus can argue with your interpretation. He can't argue with his own calendar.
Send it to him before you propose anything, with no ask attached. Give him a week. Two things happen. Either he corrects the record, which is genuinely useful because part-time work is often invisible work, or he doesn't, and now the gap is a shared fact rather than your accusation. Every founder who skips this step ends up in the same place: two people arguing about who was busier in April.
While you're gathering documents, pull your stock purchase agreements and read them. A surprising number of founders believe they have vesting and don't. If your shares were issued outright with no repurchase right, you have zero contractual leverage and everything below is a negotiation, not an enforcement. Better to know that now than in the middle of the conversation.
Path one: the Re-Vest, where you rewrite the equity and keep your cofounder in
The Re-Vest means your cofounder stays, in a defined and usually smaller role, and signs an amendment that puts some portion of their existing shares back on a vesting schedule tied to that role. It's the right move when the drop-off is situational and time-boxed, and when they still hold something the company needs.
A workable version looks like this. Marcus holds 50%. He keeps 30% outright and the remaining 20% goes back on a 24-month monthly vest with no cliff, tied to a written role: three days a week, ownership of the data pipeline, on-call rotation shared, present at Monday planning. Review date on the calendar 90 days out, as an actual invite with both of you on it, not a vague "let's check in." If he hits the role definition, he keeps vesting. If he doesn't, the amendment specifies what happens next, and that next step should be the Buyout formula, written into the same document.
Where the Re-Vest holds up. New baby. A parent with cancer. A nine-month contract job he took because the company couldn't pay him and someone had to cover his mortgage. Situations with an end date, where the person has not stopped caring, only stopped being available. It also holds up when your cofounder controls something you can't easily replace: the enterprise relationships, the codebase nobody else has read, or a technical title that your next investor is going to ask about in diligence.
Where it breaks. It breaks when the person has mentally left and is agreeing to the amendment to avoid a fight. You'll know within six weeks, because the role definition will be missed quietly and you'll be the one who has to raise it. Now you're doing performance management on a peer with no boss above either of you, which is the worst structure in business.
It also breaks when the reduced role is written vaguely. "Stay involved on product" is not a role. "Owns the pricing model, ships the Q1 roadmap, available on Slack within four hours on weekdays" is a role. If you can't write the sentence that would let you say the deliverable was missed, you don't have a Re-Vest, you have a delay.
One technical warning, and then talk to a lawyer. Putting already-owned shares back under a repurchase right is a taxable event to think hard about, and if the amendment creates a substantial risk of forfeiture, an 83(b) election has to be filed with the IRS within 30 days of the amendment under Internal Revenue Code §83(b). Miss that window and your cofounder gets taxed on the shares as they vest, at whatever the company is worth then. Nothing sours a peace agreement faster than a surprise tax bill your cofounder blames on you.
Path two: the Buyout, where they leave and you repurchase the equity
The Buyout means the working relationship ends, your cofounder's stake is reduced to something proportional to what they built, and the company or you personally repurchase the rest. It's the right move when there's no return date, and it's cleaner than founders expect once the number is on the table.
Where the Buyout holds up. Your cofounder already has another full-time job and won't say when they're coming back. They've told you, in some softened form, that they're done. Or the equity is actively blocking a financing, because a serious investor will ask why 50% of the company sits with someone who hasn't shipped since spring, and "it's complicated" is not an answer that survives diligence.
It holds up especially well when the departing founder wants out. A lot of checked-out cofounders are relieved. They've been carrying guilt for months and have no idea how to raise it either.
Where it breaks. Cash. Pre-revenue with a 409A common valuation of $0.08 a share, buying back 2 million shares costs $160,000 you don't have. So the Buyout usually can't be a lump sum, and founders who insist on one deadlock immediately.
Structures that actually close: a promissory note paid over 24 to 36 months from revenue, a repurchase at original purchase price for anything unvested plus a negotiated stake for the rest, or a tail, where they keep 8 to 12% fully vested and get paid on exit like any other shareholder. The tail is the most common outcome I'd expect to see hold, because it costs nothing today and it keeps them rooting for you instead of resenting you.
The deeper break: if there's no repurchase right in the founding documents, the Buyout requires their signature. They can say no. And if you're 50/50 on a two-person board, nobody can fire anybody. In Delaware, a genuine deadlock can land you in the Court of Chancery asking for a custodian under DGCL §226, which is a real remedy and a terrible outcome. Fees run into six figures and a stranger gets a vote in your company.
How do I raise this without blowing up the relationship?
Open with the document and a question, not a proposal. "Here's what the last eight weeks looked like from where I'm sitting. Is that how you see it?" Then stop talking and let the silence do work.
The sentence that moves people is about the alternative, not about fairness. Something close to: "I'd rather you own 30% of a company that ships than 50% of one we both let die." It's true, it's not an insult, and it reframes the equity as a live asset rather than a settled fact.
What doesn't work: raising it at the end of a long day, raising it over Slack, or raising it once and hoping the hint lands. What also doesn't work is the version where you decide the split alone and present it as final. That's not a negotiation, and people sign those under pressure and litigate them later.
When the conversation has been attempted twice and stalled twice, bring in structure before you bring in lawyers. A neutral third party changes what gets said, because both of you start explaining yourselves to someone who isn't already angry. This is the point to get the terms into a document you both actually sign: Servanda walks two cofounders through a structured conversation and produces a written agreement at the end, which matters more than the conversation itself. A verbal re-vest is worth nothing in a year when one of you remembers it differently.
Set the review date in the document. Ninety days is right for a Re-Vest. Thirty days is right for a Buyout, because a buyout that's still open after a month is not being negotiated, it's being avoided.
Which one would I pick?
The Re-Vest, first, almost every time, with the Buyout formula written into the same amendment as the fallback. Two reasons. It preserves the relationship long enough to find out what's actually going on, and it costs no cash at a moment when you have none. Most cofounders who drift out are dealing with something they haven't said out loud, and a 90-day re-vest with a defined role gives them a way back that doesn't require an apology.
But I'd switch to the Buyout without hesitation under four conditions.
- They've taken another full-time role and won't name a date they're returning. Not "soon." A date.
- The 90-day review comes and goes twice with the role definition missed both times. Once is life. Twice is an answer.
- They refuse to sign anything at all. Someone who won't put a reduced commitment in writing is not planning to honor it.
- You're raising, and a real investor has flagged the split. Dead equity kills rounds, and no amount of loyalty is worth losing the financing that keeps forty people employed.
And if you're reading this while the split is still 50/50 with no vesting on either side and neither of you has stopped working yet, fix that this month. Four-year vest, one-year cliff, both founders, applied to shares already issued. It'll take one uncomfortable afternoon and it's the cheapest insurance in your company.
