Dealing with uncooperative co-founders

1. There is no 'one' clear answer. However, you can do several things in order to make sure all the co-founders are investing their best efforts in the business. The first thing, is to set roles (not titles). When each team member know what his role and what he/she is accountable for it is easy to see who is doing what. Moreover, it's important to have regular meetings where everyone share what they are doing (and their focus for the near future). This will force 'unwilling' co-founders to do 'something' because they know the spot-light is going to be on them every X days (at the start it is wise to do a daily standup meeting).

2. In the end of the day, if you have a co-founder that can't deliver the role you have for her/him - it would be wise to cut the engagement and move forward. It's not easy and like any break-up it should be done earlier then later for the goodness of all parties.

3. The last part, is to have a founder agreement - but please keep in mind that this agreement will just help with to execute #2 not more then that.

When these types of situations come up, you need to have a good balance between the carrot, and the stick.

The carrot, or incentive portion of this rewards people for working together, and setting up a good team environment is extremely helpful. As a manager, it's your job to enable your team to be effective (The One Minute Manager is a great book for this). Carrot's don't have to be physical rewards either. Giving someone a compliment on a job well done, or similar reinforcement is something I find very effective.

And here comes the stick, or disincentive portion of making things work. You need a few things, that are really important when dealing with several cofounders. First off, you MUST have a founders agreement, and it must have provisions for the removal of one or more founders. If it is just two of you, it's good to name a mutual friend, or adviser as the arbitrator of this portion of the agreement. Also make sure your company's shares cannot be sold, so you control who can come into the business. My company uses a specific forced buyback at par value if either myself, or my partner were to leave the business. Knowing their shares are only worth something if the business succeeds, and the company decides to sell shares works as a carrot, and a stick. The second, and probably my favorite stick for getting founders, and coworkers with the program is the vesting schedule. When you setup a vesting schedule you make sure to include minimum performance clauses, and setup the schedule to encourage a consistent quality of work as well. What we use at my company for founders, advisers, and employees runs similar to this:

4 year vesting schedule with 1 year cliff (This means that all allocated shares are granted to the receiver on a regular basis, starting after the first year of employment.) We have very clear and concise performance expectations as well. This is good on two counts, lets you remove someone if they are not performing, but also makes sure they know with certainty what you are expecting of them. (Really suggest you pick up "The One Minute Manager", it takes maybe 2 hours to read, and it will change your managerial life). We usually use quarterly vesting events as well. Which means at the end of every quarter we review the employee against his performance requirements, and if he did well they get the equity.

I think the best key is to learn how to get people to do what you want them to. Reading management books and whatnot will give you a nice jumpstart on this. I recently took a long car trip and listed to about 10 books on management while I drove, was a great experience!