Breakups are painful, whether in personal relationships or business partnerships. Similar to the rising rates of marital divorce, whenever the markets get ugly, we see a surge of co-founder disagreements leading to what is often referred to as "business divorce." These separations can be just as emotionally taxing and legally complex as a marital split and just as often result in financial and operational issues for the founders, investors, and the startup itself.

Take, for example, Joe and his co-founder, who once shared a common vision and were eager to build a unique platform for their clients. However, as time passed, Joe shouldered more of the workload and generated most of the ideas. Resentment began to surface, and unfortunately, the partnership didn't last. Joe eventually decided it was time to move on and focus on his own company.

These kinds of co-founder breakups are not uncommon in the startup world. According to startup and co-founder psychologist Yael Daniely, 10% of co-founders end their working relationship within a year and an additional 45% part within four years. In The Founder's Dilemma, Harvard Business School professor Noam Wasserman suggests an astounding 65% of high-potential startups fail due to co-founder conflict.

While some of these separations are painless, such as when a founder decides to take a different job or when a co-founder gracefully steps down due to personal reasons, others can be much messier.

According to TechCrunch, 2024 has been particularly tough for founders and companies that are unable to raise sufficient capital are everywhere. This increases the pressure founders feel from their fellow co-founders and investors regarding the company's alternatives and next steps.