Co-founder exiting after pivot – what's a fair exit package?
3 throwaway-xx 1 7/9/2025, 6:20:29 AM
Throwaway for obvious reasons. I’m a co-founder of a venture-backed startup currently valued at ~$20M. We raised a strong pre-seed, built a team, shipped v1, generated revenue, and recently pivoted into a related idea that I think could work—but I’m no longer the right person to lead it. My co-founder is passionate about the new direction and wants to take it forward. I want to step away cleanly and with integrity.
I have ~10% vested. I led our early fundraise, worked unpaid for months, and contributed personal capital. I’m not trying to maximize my return—but I also don’t want to walk away empty-handed after 1.5 years of building.
My question: 1. What’s a fair exit package in this situation? A formula/rule I can use?
2. Should I just keep the vested equity? Future investors may see this as dead equity.
3. Is a cash buyout common or appropriate?
How would you approach this with the board/co-founder in a way that’s constructive and protects long-term relationships?
Would love to hear from anyone who's seen this play out—on the founder, investor, or legal side.
What is fair is to be open with your cofounder and investors.
Should I just keep the vested equity?
Should the other stockholders just dilute your holdings?
Is a cash buyout common or appropriate?
Probably less common that telling you to pound sand. Cash is the life blood of a company and giving you cash is very damaging to the startup.
To put it another way, you need to negotiate. To negotiate you need to care about the interests of the other people and in the case of a startup recognize that the vast majority of the work is in the future. And that there is no value in sunk costs. Good luck.