Your cofounder wants to leave the startup and you have maybe two weeks before the goodwill runs out. That window is worth more than anything you'll do later. While they still feel guilty and you still feel shocked, you can both sign things neither of you would sign in three months, after the lawyers, after the group chat, after they've told their version to six mutual friends.
So don't process this yet. Paper it first.
What do you say in the first conversation after they tell you?
Agree on the timeline and nothing else. Do not negotiate equity in the room where you found out, because whatever number gets said out loud becomes the anchor for every conversation after it.
What works:
"Okay. I'm not going to try to talk you out of it today. Can we do this: nothing changes for two weeks, we don't tell the team or investors yet, and we spend Thursday going through the practical list. Equity, accounts, customers, what we tell people. Then we sign something."
They will almost certainly say yes, because it costs them nothing and it delays the hard part. That's fine. You just bought a scheduled negotiation instead of a rolling one.
What they say back, most often, is some version of: "I don't want this to be a whole legal thing."
Answer:
"Neither do I. That's exactly why I want it in writing this week. The legal thing happens when we don't write it down and then remember it differently in a year."
Do not respond to "I don't want this to be a legal thing" with reassurance. Reassurance is how you end up with a handshake, a departure, and a cap table dispute at your Series A.
What do you need to sign when a cofounder leaves?
One document, ideally, covering six things. A separation agreement between founders isn't exotic and it doesn't require a month of drafting. It requires you to have actually decided the following:
| What |
The question it answers |
| Equity |
How many shares are vested as of the departure date, what happens to the unvested remainder, and whether the company is repurchasing anything |
| IP |
That every line of code, design file, deck, domain, and prototype they touched belongs to the company, signed again, today |
| Money |
Unpaid salary, deferred comp, expenses on their personal card, loans either direction, and the date each gets settled |
| Access |
Which accounts get transferred, which get revoked, on what date, and who holds the domain registrar and the Stripe login |
| Title and control |
Board seat resignation, officer resignation, removal from bank signatories, removal from any government or tax registration |
| Story |
The one paragraph you both send to investors, team, and customers, agreed word for word |
The IP one gets skipped constantly and it's the one that kills financings. If your cofounder built the original product before you incorporated, and their assignment agreement is missing or was never countersigned, a diligence lawyer will find it in 2027 and the person who has to sign the fix will be someone who no longer likes you.
"I built this too. I'm keeping my full stake."
They will say this, or a politer version. The answer isn't fairness in the abstract, it's the vesting schedule you already agreed to, read aloud.
"You have 2.4 million shares of your 4 million vested as of the 31st. That's yours, full stop, nobody's taking it. The 1.6 million that isn't vested goes back to the pool because you're not going to be here to earn it. That was the deal we both signed in March."
If they push, and they will, the useful move is separating the two claims hiding inside their sentence. One is I made real contributions, which is true and which the vested shares already pay for. The other is I should keep earning from work I'm not going to do, which is what the next person hired into their role has to be paid with.
"The 1.6 isn't going to me. It's going to whoever does your job for the next three years. If it stays with you, I'm paying for that role twice."
If you never signed a vesting schedule, you have a genuine negotiation rather than a lookup. Settle it on time served: a founder who leaves at month fourteen of a five-year build keeps something in the range of a quarter of their grant, and you write the number down the same day you agree it. Tools like Servanda are built for exactly this, turning a conversation you've already had into terms both people have actually signed, before either of you re-remembers it differently.
"Can we just tell people I'm still involved?"
No, and say no immediately. The soft-exit fiction ("stepping back to an advisory role") costs you credibility with investors and costs them nothing, which is precisely why they're proposing it.
"I'll say you're leaving on good terms and that we built the first version together. I'll say it warmly, and I'll say it to everyone. What I can't do is tell an investor you're still involved when you're not, because I'll get asked a follow-up question in a diligence call and I'll have to walk it back."
If they want an advisory title, make it real or don't grant it. Real means a defined number of hours, a defined term, and an advisor grant that vests over that term. Two hours a month for twelve months, 0.1%, done. Vague means they get to introduce themselves as your cofounder at parties for a decade while you carry the company.
What has to physically happen before their last day?
Access transfer, on a shared screen, with both of you present. Not "send me the logins", which reliably produces four of eleven logins and a password manager export missing the one that matters.
Block ninety minutes. Go through domain registrar, DNS, GitHub org ownership, AWS or GCP root account, Stripe, the business bank, Google Workspace super admin, the Apple developer account, the analytics stack, and any SaaS billed to their card. Change ownership live, one at a time. The Apple developer account is the classic trap: it's often registered to an individual, transfers are slow, and you'll find out in the middle of a release.
Then the customers. For each named account they own:
"I'm going to email Dana at Northwind saying you're moving on, I'm taking over, and asking for a call. Can you reply-all to that with one warm line? Not a long thing. Just so she sees it came from you too."
That single reply-all is worth more than any handover doc, and it expires. Ask for it while they still want to be seen leaving well.
