Breaking Up (With a Co-Founder) Is Hard to Do —WSJ

“It Got a Bit Ugly”

Sarah E. Needleman at the WSJ Small Business Blog reports:  Ten months after co-founding a communications firm in 2008, Tami Hausman asked her business partner to meet at a local Starbucks. Things weren’t working out, Ms. Hausman says, and she wanted to run the New York company on her own.

“It was extremely stressful,” recalls Ms. Hausman, because she anticipated that her partner would be surprised and upset. “I didn’t want to hurt her feelings.”

Ms. Hausman, a first-time entrepreneur, says she decided to dump her business partner because they had different goals, even though they seemed to be in alignment at the beginning. She says she wanted to grow the company by hiring employees, building a website and leasing office space, rather than continue working out of each other’s homes. Her partner, she claims, preferred to keep the firm lean.

“It got a little ugly,” says Ms. Hausman, 44 years old, adding that she ended up buying her partner out.

The co-founder declined to comment.

Many people start businesses with partners, often so they can benefit from the others’ expertise, connections and finances. But sometimes one founder concludes over time that the relationship is flawed and parting ways would be best.   Announcing a desire to split up and subsequently dissolving a business partnership can be tricky, as emotions tend to run high.   How you go about handling the situation can mean the difference between an amicable split, where you run the business as you see fit, and a messy divorce, in which you wind up losing money, clients, resources or other critical assets.

Before dumping a co-founder, also make sure you have access to key information, such as the firm’s bank account and Internet passwords, and that any intellectual property critical to the business is owned by the firm and not the person you’re planning to push out, says Anthony McCusker, a partner with law firm Goodwin Procter in Menlo Park, Calif.

Worst Case Scenario: Consider Breaking Up

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