Winning Isn't The Goal in Cofounder Negotiations

Or, What I Learned Teaching for a Day at Harvard Business School

I recently had the chance to spend the day at Harvard Business School speaking with the students in The Entrepreneurial Manager (TEM) class. The case and exercise were about co-founder negotiations.

First, it was awesome to be at HBS. I loved EVERY minute of it. It makes me think about teaching some in this next chapter.

Second, watching the students work through these tough conversations was a reminder that these aren’t just theoretical exercises—co-founder negotiations set the tone for relationships that can last a decade or more. The way you negotiate now determines how you’ll work together when things get hard. And they will get hard.

At the end of the exercise, I asked each class:

“Raise your hand if you feel like you won your negotiation.”

A few hands went up.

“Now raise your hand if you feel like you lost.”

A few more hands.

But here’s the real question: If one of you “wins,” what does that mean for those that lost…. and for the overall value of your company?

A few learnings:

1. Winning ≠ Building

Too many people approach these conversations like a competition—trying to “win” at their co-founder’s expense. But negotiations between co-founders aren’t about one person coming out ahead. They’re about creating enterprise value together. If you act like an asshole now, or if your co-founder treats you like one, it won’t be a one-time thing. It will show up again and again in your working relationship. Trust me.

2. Equity ≠ Control

During the exercise, I watched teams fight for every last point of equity, thinking it would give them more authority. The truth? Equity and operational control are two different things. Shares are rarely voted except during major moments— like company sales and fundraises. Day-to-day, control lies with the CEO. And if you fight for equity at the expense of your co-founder, you might end up with a big slice of nothing. 51% of zero is still zero.

3. Clear Decision-Making Authority is Everything

One of my mentors used to walk into meetings and ask, “Who’s in charge here?” If the answer wasn’t obvious, that was a problem. Consensus might feel good, but it kills startups. Someone has to have the final say. Forget about “co-CEOs”—they almost never work. If there’s no clear decision-making structure, small disagreements turn into massive roadblocks.

So, the way you negotiate with a co-founder is the way you’ll work together. If you don’t trust each other now, you won’t trust each other when the stakes are real. If you fight over scraps today, you won’t build something worth fighting for tomorrow. And if you can’t agree on who’s in charge, your company won’t make it.

Co-founder relationships can last 10 years or more. The choices you make in these early conversations don’t just shape the deal—you’ll be living with them for a long time. Choose wisely.

Would love to hear from founders—how did your early negotiations shape your partnership?

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