Founder Conflict 101: Reaching Consensus

I have served as a professional mediator in San Francisco, specializing in resolving conflict among startup founding teams for the last year and a half. My partner and I have facilitated multiple early stage startups with a combined valuation of over 10 Million, all of which have been able to reach formal agreement and deeper levels of trust among members.

The Challenge

Facilitating these agreements is particularly difficult due to the fact that the founders may be withholding crucial information from each other (such as their intended duration of involvement in the company). In these situations, there are clear financial advantages to withholding information from their co-founders. Revealing information, such as leaving the company in 2 years for a co-founder to start another venture, would risk current equity rewards, and promote animosity between founders (“the other guy will just leave in another year, I’m the one who’s in this for the long-run”). Protectionist measures play out in aspects of who gets what, who deserves how much, what working culture should be, each founders capacity to trust the others judgement, roles, names for those roles, who has power to execute, evaluate of new hires, who fires, who pitches, who takes out the garbage, who represents them in the eyes of the public, investors, when will one co-founder quit their day-job, who do they raise money from.

Personal Identity = Company

To further the pressure, many co-founders I have meditated are living with a ‘fake it till you make it’ attitude, with the image of the startup being successful tied to their own identity. Early stage founders have, by consistently pitching their company to others, become enveloped in their own bubble. They are what they do and there is no separation of who they are outside of their venture. To the outside observer, they are always doing amazing! In many cases it is a chaotic environment, founders are stretched for time, money and capacity to get things done.

When asking a co-founder what they ultimately want, they usually respond on the basis of what is best for the company, not from their own accord. It takes skill and presence to arrive at and unpack the underlying motivation and feeling they want addressed. By active listening, a humanity in each motivation is realized: “I want to feel that she respects my judgement.”, “I want this thing to make tons of money, so I’ll never feel financially insecure again. I grew up dirt poor.”, “I want to get through this experience, and look back on this as friends when we’re seventy.” “I want to succeed this time, my last startup was a failure and my wife, who was working at the time, gave me hell for being away from the family.”

Core Motivations

Getting to these core motivations for each party (without judgement) is the most difficult part. After these motivations are uncovered, I can easily formulate an agreement that truly works for (and can be honored by) both parties. Personal transformation is a beautiful byproduct of this process, as each party sees what truly drives their own actions. My final questions to them individually: “Now seeing your core motivation of [repeat core motivation], is this in alignment or conflict with your vision for the company? What would it look like to satisfy both your core motivation and a successful company vision?”

(Through my experience, some mediations require context that is best gained through individual facilitation prior to the group meeting. Individual caucus can provide a safe space to get to true motivations and arrive at clarity of must have requirements.)

How to Reach Consensus

My mediation/facilitation process centers around two pillars of and , which take the form of simple agreements made during the first 5 minutes of each meeting:

In mediation, early in the meeting I facilitate a verbal agreement from both parties on ‘why’ exactly is this meeting being called (i.e. To remove obstacles to collaboration, to decide on equity agreements). After this agreement is made in the open (I often put the big “WHY” on the board in the room), I can use the agreement to focus the discussion, holding each party accountable to this agreement.

Safe space is a space that is conducive to open sharing and requires a few key agreements from participants:

Balancing the Why and What

Reaching consensus and agreement is a balancing act. On one end it requires consistently focusing on the overarching ‘why’ we are meeting together. On the other it is leading an exploration, specifically, on the ‘what’ that motivates the parties to do what they do. The ‘why’, is something that is less dynamic during the meditation process, which is why it can be put on the board quickly and used to re-focus through the meeting. The ‘what’ is constantly being uncovered through open ‘how’ and ‘what’ questions.

Much of my job as a mediator is . At the same time, while building consensus, I ask myself, “what is the common thread that is tying these parties together? Can this be woven into a shared narrative?”

Mediator, Facilitator & Water Entrepreneur

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