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1 in 4 VC-backed startups will have a founder leave by year 4.

So: will 𝘺𝘰𝘶𝘳 cofounder leave?

Of course not! You two are in it until IPO.

But across VC-backed startups, founder departures are a regular feature of the landscape.

We looked at 13,133 founders that started companies between 2015 and 2024. We then plotted the cumulative percentage of them that had left their companies over time.

These companies had to have:

a) been started in the US
b) raised at least some VC cash
c) started with 2 founders in the team

You read the chart left to right-for example, in the 2017 cohort, 24.1% of founders were no longer with their startup by the 4 year mark.

𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗙𝗶𝗻𝗱𝗶𝗻𝗴𝘀

• Looks like founder departures in the first year have gotten a little more common lately

• Definitely some impact from the VC downturn in 2022 and 2023. Startups founded in the years immediately preceding the boom/bust have left at slightly higher rates.

• Typically founders have a 4-year vest on their shares. That means that about a quarter of founders will leave before their vest is complete (although it may be a higher if the vest didn't begin until the first VC round).

• This data doesn't look at startups that have shutdown, so the later years are just a view into companies that are still ongoing.

If the right analogy to co-founding a company is marriage (and I think it works pretty well), then this data shows the value of a "founder prenup" aka vesting schedules. Everyone should have one!

More data on founders and the companies they build out every Thursday in our Carta Data Minute newsletter - subscribe at the link in graphic.

It is a nice report. Thanks, Peter! 

I would love to see similar analyses in other dimensions-how are VC-backed vs. bootstrapped startups different, reasons for founders leaving, etc.?

Original Message:
Sent: 12-02-2024 10:19
From: Peter Walker
Subject: Will your cofounder leave?

1 in 4 VC-backed startups will have a founder leave by year 4.

So: will 𝘺𝘰𝘶𝘳 cofounder leave?

Of course not! You two are in it until IPO.

But across VC-backed startups, founder departures are a regular feature of the landscape.

We looked at 13,133 founders that started companies between 2015 and 2024. We then plotted the cumulative percentage of them that had left their companies over time.

These companies had to have:

a) been started in the US
b) raised at least some VC cash
c) started with 2 founders in the team

You read the chart left to right-for example, in the 2017 cohort, 24.1% of founders were no longer with their startup by the 4 year mark.

𝗜𝗻𝘁𝗲𝗿𝗲𝘀𝘁𝗶𝗻𝗴 𝗙𝗶𝗻𝗱𝗶𝗻𝗴𝘀

• Looks like founder departures in the first year have gotten a little more common lately

• Definitely some impact from the VC downturn in 2022 and 2023. Startups founded in the years immediately preceding the boom/bust have left at slightly higher rates.

• Typically founders have a 4-year vest on their shares. That means that about a quarter of founders will leave before their vest is complete (although it may be a higher if the vest didn't begin until the first VC round).

• This data doesn't look at startups that have shutdown, so the later years are just a view into companies that are still ongoing.

If the right analogy to co-founding a company is marriage (and I think it works pretty well), then this data shows the value of a "founder prenup" aka vesting schedules. Everyone should have one!

More data on founders and the companies they build out every Thursday in our Carta Data Minute newsletter - subscribe at the link in graphic.

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Peter Walker
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