A composite case study. Names, sectors and timelines are changed. The pattern is drawn from real Irish partnerships.
The email arrived on a Thursday evening, three paragraphs long, the second of which began with the words 'I've been thinking about this for a while.' By Sunday night the remaining founder was on the phone to a corporate solicitor in Cork asking a question for which there was no good answer.
Eighteen months earlier, two engineers had incorporated a B2B SaaS company with a 50/50 split, a model constitution downloaded from the CRO website, and a verbal agreement that they would 'sort the legal stuff' once they had paying customers. They had paying customers within six months. They never sorted the legal stuff.
What the cap table looked like the morning after
Fifty per cent of the company belonged to a person who no longer worked there, had no contractual obligation to return, and could not be removed as a shareholder without his consent. The remaining founder owned the other fifty per cent and was about to start a Series Seed conversation that, in practice, was now over before it began.
- Month 0Incorporation. 50/50. No vesting, no shareholders agreement, no leaver provisions.
- Month 6First paying customers. €40k ARR.
- Month 12Pre-seed angel round explored informally. Investors flag the cap table; founders agree to 'tidy it up later'.
- Month 17Technical co-founder receives a senior offer from a Dublin scale-up. Tells his co-founder he is 'thinking about it'.
- Month 18Departure email. No notice period. No buyback mechanism. No vesting cliff to invoke.
- Month 21Lead investor in proposed seed round withdraws, citing 'unaddressed founder risk on the cap table'.
The early warning signs
- Vesting was discussed once and dismissed as 'something we'd do for employees, not for us'.
- The technical founder had quietly started taking external interviews three months before the email.
- Investor pushback on the cap table was treated as a future problem.
- Neither founder could explain, if asked, what would happen if one of them left next week.
- There was no written notice period and no defined handover process.
The conversations they never had
- If one of us leaves before year four, what happens to our shares?
- What is the difference between a good leaver and a bad leaver, and who decides?
- How much notice do we owe each other and the company?
- If an investor tells us our cap table is unfundable, what do we do?
"I didn't lose my co-founder. I lost the company's ability to raise. Those are not the same thing, and I didn't understand that until it was already happening."
What happened next
The remaining founder spent six months negotiating a partial buyback at a valuation the company could not really afford. The seed round was eventually closed at a meaningfully lower valuation than the original term sheet, with a clean-up clause forcing the original founders onto a four-year reverse-vesting schedule. The departing founder retained a smaller, but still material, stake.
What PartnerReady would have flagged
- SEVERE risk on Exit: no vesting, no leaver clause, no buyback mechanism.
- HIGH risk on Equity: equal split with no protection against dead equity.
- HIGH risk on Decisions: no notice period, no defined handover, no transfer restrictions.
- A specific recommendation to put four-year vesting with a one-year cliff in place before any further fundraising conversations.
Questions to ask yourself
- If your co-founder resigned tomorrow, what fraction of the company would they keep?
- Have you written down what counts as a 'good leaver' and what counts as a 'bad leaver'?
- Would your cap table survive an hour of investor due diligence?
- What is your notice period to each other, in writing?
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.