Ask HN: My Cofounder was diagnosed with cancer, what should I do?
My cofounder and I started the company 9 months ago. We are on 4 year 1 cliff vesting schedule. This coming June 2024, we'll finish the 1 year cliff. However he only commited 6 months out of this 1 year. And I can't blame him for that as none of us has expected this scenario. What should I do?
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[ 2.9 ms ] story [ 125 ms ] threadThe fact that you're asking this question on HN suggests not.
Edit: To add context, I assumed that you mean your cofounder was about to die and can no longer run the company. But now I realize that you didn't say that.
If you don't and you're pre-PMF though, I'd just shut down or pivot to something else if it doesn't make sense anymore. (I ran a YC startup and my cofounder split. I stuck with it for too long, and I got depressed working on the old thing alone when it still wasn't getting anywhere.)
In all seriousness, do unto others as you would like them to do to you.
While I understand this sentiment - is that really how you create a successful business?
If you have a worker who just doesn't perform at all, no matter what you do, should you fire them? Would you want to be fired if the tables were reversed?
Hopefully you got some decent key person insurance set up at the start. If not, whoops.
The next thing to do is to talk it out. Does he want out? If so, can you buy him out? If not, is it realistic that he can stick around? Is there anyone in your network you can bring in to replace him (temporarily, if he's got a good outlook)?
If he can't work in the business any more I suspect you should approach this in a fairly similar way to how you would if he just wanted to leave for any other reason, or wanted to take a large block of time away from the business. Being dispassionate about it, you have to accept that the fact it's cancer is actually largely irrelevant; that's just the catalyst for action. As far as the business is concerned it's the action itself that's important.
That person has just received some of the worst news of their lives, for no fault of their own. This is very relevant for approaching them with patience, kindness and care.
OP will need to reconcile their ambition and past expectations with being a decent human being and, possibly, a friend.
Cancer is bad, but without more details is imposible to know how bad it is. I've seen case in my family when they got a cancer, it was operated and got a minimal post treatment and lived happy ever after a few decades and counting, and other cases where it was too late and died like one year after the diagnosis. I had similar experiences with coworkers.
For example, in some prostate cancers the recomendation is to "do nothing", or to be more precice to wait and check them frecuently https://en.wikipedia.org/wiki/Active_surveillance_of_prostat... But in other cancers waiting is stupid and shoud be removed asap and get chemo and more.
Fwiw, I was close to dying before him a few weeks back in a medical emergency, something we both didn't see coming. In the end, fate can always find a way.
Step 2 - depends on wether he can and wants to stay involved.
Step 3 - go to step 1.
In germany and other europeon countries, their family would inherit his shares which can become a problem if those family members do not care about the company at all and just want out or nothing to do with it.
We talked to our partners and told them what we want them to do and they would become silent partners without control.
Nonetheless, this is actually independent of him having cancer.
When we set up vesting for ourselves, we just wanted a huge portion of something for super cheap and taxed beneficially if we made an 83b or 83i election, and we realized that the terms of vesting wasn’t regulated and we had unilateral discretion over everything. Our cost basis wasn’t zero, but we wound up having $200 grants with like 3 month vesting. We exercised immediately, mailed the election in, and then had paper value way higher super fast after sales at much higher prices, with a lot of liquidity.
I periodically reaffirmed with my cofounder what the purpose of our venture was
“We’re still in the money game, right?”
and this supports our financial engineering, as opposed to being steered or married to the particular idea or line of business
so all that’s to say, what game are you in? do you two have unilateral control over the contracts? maybe that steers the conversation more than wondering if they could or should make the cliff for some illiquid startup ownership
people need to use their imagination
I do remember Pipe being in vogue a while back around financing based on futures of subscription fees, but so far that's the only model I can think of that isn't debt with either a) its associated covenants or b) some kind of underwriting box piggybacking off of dilutive capital (venture debt)
In general, succession policy in companies keep the business running when individuals eventually leave. No one person's role should be so uniquely important that a firm will stop growing if they disappear.
In large firms: births, illness , and deaths are a daily occurrence.
In small firms, once the founders leave only a third of companies survive the next 2 years.
You may have your creditors target your firm as well, as the talent pool needed to reach a profit-mode may no longer be seen as viable.
Also, talking about other peoples health issues without consent may be a crime in your region (in my country it is a $93k fine per violation.)
Your company is just a job, just a company.
What would you expect of him if you'd be in his situation? I'm sure that having a successful company would be the last thing on the list (if it was there at all).
I'm not sure this is true anymore. Various cancers are curable (if metastasis has not occurred), and others have good long-term treatments available.
And if you mean "ending" in the long-term, then I'm afraid that is true for all of us.
Then, it's pretty obvious that you should take this as a problem that "hits the company", as in you should solidarly take the "loss" that his illness is causing the company. So he should be paid the same as if he was fit to work, and vest him like you are.