If you work long enough, date enough people, have enough friends, live long enough, you learn an uncomfortable truth: Good actors are indistinguishable from bad actors. Only behavior separates them.
Two People, Two Directions
One of our founders launched his company with a co-founder more than a decade ago. Fifty-fifty ownership. Mutual history. Shared conviction about a problem worth solving.
In the early days, they both worked relentlessly, just in different directions. One obsessed over the product, the first version of the technology, hiring engineers, falling asleep thinking in code. The other looked outward toward customers, partners, and investors.
They raised capital, formed a board, and began to scale customer acquisition. That is when the divergence started. The first cracks in the foundation.
The externally oriented founder began selling a vision that drifted from reality and, more importantly, from his co-founder’s vision. Worse, he sold that version of the future to investors and board members in private conversations and emails.
They were no longer in lockstep.
One founder believed he understood the market and was building a following. The other found himself apologizing to customers and explaining delays to an increasingly frustrated investor group as the gap between promise and delivery widened. Not because the team could not execute, but because the founders no longer believed the same things.
They tried to reset, but the differences proved irreconcilable.
The CEO asked his co-founder to separate. I witnessed the conversation. It was honorable, clear, and humane: “We believe in different futures. We’re confusing our stakeholders. I respect what you’ve built here, but if we continue together, we’ll destroy the thing we both care about.”
The co-founder looked at him and said, “I agree. Let’s find a respectful way to part that honors the company, our customers, our employees, our investors, and each other.”
That’s when the good actor revealed himself as a bad one.
The Mask Slips
The co-founder told investors and employees that the CEO was killing the company. He locked others out of the source code and threatened to erase it unless demands were met. He demanded full vesting acceleration, 12 months of severance, discounted future investment rights, and a voice in the form of an irrevocable board seat.
The CEO is a kind man who believes in people. When the first investor called him after speaking with the co-founder, he assumed there had been a misunderstanding. Then came the second, third, and fourth calls. Then a customer inquired about why the CEO was resigning.
The disinformation campaign had escalated. What followed was sad and mechanical.
The CEO engaged counsel. Reviewed voting rights. Met with board members. Terminated the co-founder. Offered a choice: courtroom or separation agreement. Signed an agreement. Met with employees one-on-one and as a group, honoring the departing co-founder while explaining the fundamental disagreement.
Was some of that theater? Yes. Sometimes theater prevents court.
It took months and a great deal of legal expense. And throughout that time, the startup stuttered and nearly died.
Why Tell This Story?
Character is not tested when things are easy. It is tested when the stakes are high. When money is involved. When existential risk appears. During conflict. That is when people show themselves.
I ask founders to listen to the quiet voice, the one you hear when you slow down. Can I trust this person? Will they behave with decency when things are hard? Will they care about more than themselves?
If the answer to how they will react to hard truths is anything other than an unequivocal yes, you must prepare.
Armor Up
I’ve written about this before, but let me share a second story.
Another CEO of mine faced a similar moment. He came to the difficult conclusion that his technical co-founder was wrong for the role. The company had a big vision, a strong team, ample capital from quality investors, excited brand-name customers, and no working product.
Months passed. Everything progressed except shipping the actual solution. When pressed, the CTO supplied a stream of excuses. Attempts by the CEO to run retros or gain visibility were deflected, and confidence eroded across the team.
It was time for a change.
How would the CTO respond? Accountability? Ownership? A clean transition? Or something else?
I asked the CEO to pause, close his eyes, and imagine the conversation.
He opened them and said, “This might not go well.”
That was enough.
There was no certainty that the CTO would behave badly. But possibility alone is reason to prepare. That means protecting the IP, the team, the brand, and more.
- The CEO and I built a workback plan covering access shutdowns, ownership transitions, communications, and the first week without the CTO.
- He spoke with counsel first, not expecting fireworks, but because employment law is deep water, and you do not learn where the rocks are by hitting them.
- We looped in the board early to avoid surprises and prevent alternate stories.
- We eliminated single points of failure by backing up code and infrastructure and ensuring nothing mission-critical lived only in one person’s head or laptop.
- We prepared the conversation. A velvet hammer: humane, calm, final.
- The CEO later met one-on-one and in small groups with key leaders to explain the decision without disparaging the departing CTO.
The conversations with the CTO were ultimately unremarkable. Sad, hard, but unremarkable. The CEO and CTO developed a transition plan together, and all constituents were messaged in a collaborative way. But that’s less the point. My CEO was ready, regardless of which path the conversation took, and that allowed him to show up for one of the most difficult discussions of his professional career with calm and grace.
The Difference Readiness Makes
In the first case, the bad actor ambushed the CEO. In the second, we were ready.
Years later, I met the first CEO for a drink. We talked about the chaos, the calls, the fear, the negotiations. I asked whether he knew before talking to his co-founder about leaving that it might go as badly as it did.
He said, “I don’t know if I knew for sure. But if I’m honest, I knew it was possible.”
And that should have been enough to prepare.