[willseth]

100%. This is an opportunity to lead, not walk away. Maybe he still fails, but it's a valuable learning experience either way and a much better story to tell assuming he wants to found another company. Conversely, walking away in frustration will be a red flag for many investors.

[tptacek]

Counterpoint: unless there's an opportunity for the company to be a success --- which, 18 months into its seed investment, it does not appear to be --- nobody is going to care whether this person stayed on to the bitter end.

[JamesBarney]

The ROI of investing another year or two of frustration and failure so a handful of investors might have a marginally better opinion of you is poor to say the least.

[willseth]

If you don’t care about founding another startup then it doesn’t matter. If you do, than that handful of investors is how you land your next gig.

[JamesBarney]

There's no guarantee they'll invest in his next startup, even if he stays until the bitter end.

It's also possible that over the next two years, either he or his coworker could damage their relationships with investors. Typically, messy blow-ups reflect far worse on founders than politely stepping away. It often goes better to simply say something like, "Hey, I'm sorry, but I don't think we're aligned anymore. This startup probably works best with just one captain at the helm, so for that reason, I'm out."

Most importantly, even if sticking around for another year or two meant the difference between guaranteed funding and none at all, I'd still choose the extra year or two over the funding. Founders usually earn half—or even a third—of what they would make elsewhere. That extra time essentially translates to a couple of years of self-funded startup runway, and I'd much rather have that flexibility than guaranteed funding with strings attached.

[willseth]

VCs don’t care as much about failure as you might think. They make investments expecting 90% failure and understand that timing and luck are big factors in success, so they are simply looking for people who they believe can lead through rocky stages and navigate difficulty. Assuming you want to continue to be a founder, bailing on the company you founded, even in the face of very frustrating conflict, reflects poorly.

[ra0x3]

OP seems trapped between a rock and a hard place. Doesn't seem bought in, not having a good co-founder relationship (a recipe for failure). But walking away would be a HUGE red flag for his future. I don't envy OP's position.

[necubi]

It's really not a huge red flag. Co-founder breakups are incredibly common. In this case the company is also flailing and has been likely written off by their investors, so they're not going to care.

Something I've learned doing a startup and talking to a lot of other startup founders is that one of the biggest risks is sticking around for too long just because there's still money in the bank. Your most precious resource is time, and if it's pivot-hell for 18 months you're well into sunk-cost land.

[willseth]

If he wants to found another company he will need to pitch to investors and will be thoroughly interrogated about his experience before they will consider giving him money, and it’s a lot harder to sell a backstory where you bailed on your last startup.

[notahacker]

A backstory where he explains dispassionately that after repeatedly unsuccessfully pivoting into industries neither of them understood, he came to the conclusion his cofounder wasn't learning from these mistakes and he needed to take a different approach even if it meant starting again with nothing doesn't sound any harder to sell than a backstory where he explains the rationale behind pursuing four more pivots he didn't believe in before running out of money. Also sounds like a situation where his existing investors have probably written off the money and may even agree with his perspective on the pivots.

Bailing from a startup with significant traction or bailing when it's too early to tell could be much harder to explain away, but it doesn't sound like that's the problem here...

[fzwang]

Working through a really difficult situation like this could actually make their working relationship much stronger. To your point, even if they fail they'll learn from the experience, which will be useful for their next venture (either together or going separate ways).