Posted on May 2, 2019 by staff

Half of co-founders buy out their business partners


Nearly half of co-founders have to buy their business partners out, new research has said.

The study revealed that more than two fifths (43 per cent) of co-founded businesses require one founder to buy the other out of the business, following rifts.

London-based VC investment fund Fuel Ventures surveyed more than 3,000 founders and co-founders across the UK and found that of the most common reason for founding teams splitting was a ‘difference in opinions for the company’s direction’.

Of the 43 per cent, more than two thirds (71 per cent) stated it was because of a difference of opinion on the company’s direction, whilst 18 per cent said they felt the co-founder ‘didn’t reciprocate their beliefs/values’.

92 per cent of respondents who’ve split said that it was catalysed by a ‘single specific disagreement’ regarding a business decision, following a period of dispute/unrest within the founding team.

73 per cent of founders said they wouldn’t consider co-founding again after the experience.

Fuel Ventures founder, Mark Pearson, said: “For entrepreneurs all over the globe, having a co-founder offers a great source of confidence, as well as giving people a great chance to bounce ideas and concepts around, and if the relationship is good, a co-founded company can be extremely successful.

“However, as our research shows there can be some negatives to having a co-founder, particularly if you don’t share the same business beliefs, values or ethics.

“We invest in businesses with an array of founding stories, whether it’s one founder whose had a business concept since they were a child, two co-founders who dreamt up their idea in a bar, or a group of five who decided to take the leap themselves – if they’ve got a good business and good drive, there’s a place for them here at Fuel.”