Wednesday, October 5, 2011

Is your startup prepared to deal with a death of a co-founder?

Today's events of Steve Jobs' death got me thinking about my company and what would happen if I or my co-founder died.  The results would be pretty tragic not only to our friends and family, but to our business, partners and customers as well.

Renelito and I are pretty sharp people, and I'm confident that a death would merely be a hiccup in the success of Tenacity Worx and our partners.  However, as I think out loud, there are a few things that we probably should know and prepare for in case the worse happens.  Some of these things may seem obvious, but with so many other priorities with you company, I doubt that you have everything ready.

Legal documents:  Have your operating agreement in place if you've formed your company and know your lawyers.  All founders should know their legal team and have their email address and cell phone number handy.  Looking over our documents, I see that a death would not terminate our company.  In our case, the other co-founder would take control of the business and any disbursements would go to the estate of the other co-founder.

Passwords:  While you can get into many servers without a password if you have console access, it would make it easier if there's a safe place that all of the passwords are stored.  Make sure your passwords are updated regularly and your entire founding team is aware of it.  Passwords should be written down for the production servers, customer related tools (CRM, etc.), DNS zone file, email provider, etc.  Even when your company balloons to thousands of employees, never let the disgruntled IT be the only one with the keys to the kingdom.

Finances:  All co-founders should have access to the bank accounts.  It would really suck if you just closed your financing, but you can't get access to it.  A simple trip to the bank with all of the co-founders should solve this issue.  Many companies have multiple bank accounts that are independent of each other such as the business operations' account and the payroll account.  Make sure all the co-founders have access to them all.

Backups:  Many backups are held in the cloud, so you should be okay in the event a server falls apart and your technical co-founder is not there.  I recommend that every once in awhile you copy your SVN repository to a CD and have a copy held at each of the co-founders homes.

Intellectual property:  Is your secret sauce kept only with one person?  If so, you may want to sit down and share the details and document it.

Apple, Inc. will go on and continue to make innovative and inspiration because the company was never really about one person, it was about it's 46,000+ employees and the ~7 billion people on this planet.  While your company may be one person, two people or just a small handful, you as their leader always should work hard towards your vision, but be mindful of the present.

You can follow Allan on Twitter at @allanscu.

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