Survey finds nearly 50 per cent of all business co-founders buy their partners out

Wed, 08 May 2019 | BUSINESS NEWS



A survey of more than 3,000 UK-based business founders and co-founders revealed than 43 per cent were forced to buy their partners out of the business as a result of power struggles and internal conflicts.

Conducted by London-based venture capitalists Fuel Ventures, the research found the inability to agree on the direction of a company was the most prominent reason for co-founders splitting. Of those who had bought out their co-founders, nearly three quarters (71 per cent) claimed “a difference of opinions for the company’s direction” was the primary reason for breaking up, whilst 18 per cent believed their partner “didn’t reciprocate their beliefs/values”.

The majority of all those polled (92 per cent) revealed that the split came about as a result of a “single specific disagreement” pertaining to a business decision, which followed a prolonged period of disagreements and turbulence amongst the founders.

As part of the survey, when asked if they would consider getting into another business partnership, 73 per cent of all respondents said they would not; but of those who would, 81 per cent said they would “only do so with someone they knew well.”

However, the research found some positives to having a partner. Over half said they felt “more confident and comfortable with a co-founder” whilst roughly a third claimed they “felt obliged” to enter into a partnership, having come up with the business idea together.

Mark Pearson, founder of Fuel Ventures, said: “For entrepreneurs all over the globe, having a co-founder offers a great source of confidence, as well as giving people a great chance to bounce ideas and concepts around, and if the relationship is good, a co-founded company can be extremely successful. However, as our research shows, there can be some negatives to having a co-founder, particularly if you don’t share the same business beliefs, value or ethics.”


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