A composite case study. Names, sectors and timelines are changed. The pattern is drawn from real Irish partnerships.
They had been friends since school. They incorporated on a Tuesday afternoon in a solicitor's office in Dublin 2 with a one-page constitution, a fifty-fifty split, and the kind of mutual confidence that makes lawyers quietly raise an eyebrow.
For the first nine months it worked. Aoife sold. Dara built. Neither of them drew a salary. They split the few small invoices that came in down the middle and put the rest back into the company. When friends asked how it was going, they used the word 'we' the way couples do.
Then the contract came in. A six-figure annual deal with a regulated client, won mostly off the back of three months of relentless follow-up by Aoife. The company had real money for the first time. And within a fortnight, the friendship had a problem neither of them knew how to name.
What had quietly happened
The split had been equal because the friendship was equal. Nobody had asked the second question — equal contribution of what? Time? Cash? Sales? Code? Risk? Reputation? In the year before incorporation Aoife had carried two-thirds of the customer-facing work and almost all of the commercial risk. Dara had built the product but had also been salaried elsewhere for the first six months. Neither of them had said this aloud.
It is the most common pattern PartnerReady sees in friendship-led incorporations. Equality at the cap table is treated as a proxy for fairness. It rarely is.
- Month 0Incorporation. 50/50 split. No vesting. No shareholders agreement. No written role definition.
- Month 3First small invoices. Aoife working full-time, unpaid. Dara still part-time and salaried elsewhere.
- Month 7Dara leaves his job. Both founders now full-time, still unpaid.
- Month 11Major contract signed. €120k ARR. First real cash in the bank.
- Month 12Aoife asks, gently, whether her earlier risk should be reflected in salary or a one-off equalisation. Dara feels accused.
- Month 14Two consecutive missed product deadlines. A client complaint. Aoife covers it. Resentment hardens.
- Month 18A solicitor is finally engaged — not to draft an agreement, but to mediate a separation.
The early warning signs they both ignored
- Neither of them could articulate, in writing, what 'fair' would look like at scale.
- The phrase 'we'll figure it out when there's money' was used at least four times in the first year.
- Salary was treated as a future problem instead of a present commitment.
- Effort was being silently scored by both founders, but never compared aloud.
- The friendship was used as evidence that the legal structure didn't matter yet.
The conversations they never had
- What does 'full-time' actually mean for each of us, and from when?
- If one of us leaves in the next twenty-four months, what happens to the equity?
- When the company can afford salaries, who decides what they are?
- What counts as a contribution worth equity — capital, time, sales, IP, or something else?
- What is the smallest disagreement we would each be willing to escalate to a third party?
"It wasn't the money that broke it. It was the realisation that we'd never actually agreed what we were doing."
What happened commercially
The company survived. Aoife bought Dara out at a valuation neither of them was happy with — too high to be sustainable for the business, too low to feel fair to the departing founder. Legal and accounting fees consumed roughly four months of runway. The first major client renewed, but the second did not, citing 'instability in the leadership team' in writing.
Two years on, the company is profitable and Aoife is the sole director. She and Dara have not spoken socially since.
What PartnerReady would have flagged
- HIGH risk on the Equity dimension: equal split with no documented contribution analysis.
- HIGH risk on Exit: no vesting schedule, no leaver provisions, no buyout mechanism.
- MEDIUM risk on Money: no agreed trigger or formula for first salaries.
- MEDIUM risk on Commitment: asymmetric full-time start dates with no equity adjustment.
- A specific recommendation to have the salary-and-vesting conversation in writing within ninety days of incorporation.
Questions to ask yourself before this becomes you
- If our company doubled in value tomorrow, would we both privately feel the split was fair?
- Have we written down, in plain language, what each of us is committing — and from when?
- If one of us walked away in eighteen months, what would the other one keep?
- What is the first uncomfortable conversation we have been postponing?
The PartnerReady check will usually surface the underlying risk in under ten minutes.
Twenty questions across equity, exits, IP, decision-making and commitment. No account required. No data leaves your device until you choose to generate the report.
Questions readers ask
Is a 50/50 co-founder split always a bad idea in Ireland?
No. Equal splits work well when contributions, commitment and risk are genuinely equal and when leaver provisions and a tie-break mechanism are documented in a shareholders agreement. The problem is rarely the split itself — it is the absence of structure around it.
Can a friendship survive a co-founder buyout?
Sometimes. In our composite data, friendships are far more likely to survive when the buyout terms were pre-agreed (in a vesting schedule and a leaver clause) rather than negotiated in the middle of the dispute itself.