Dispute Prevention and Resolution Options That Can Save Start-Ups from Failure

Myrna Barakat

June 2, 2021

By their very nature startups are risky projects. Startup founders can have great ideas but monetizing those ideas requires a specific skill set that often doesn’t reconcile with those of the risk-taker mentality of entrepreneurship. The unfortunate truth is that for every Facebook there are hundreds, if not thousands, of failures. One would think that lack of funding would be the primary factor threatening success. However, according to a study conducted by Harvard Business School professor and author of “Founder’s Dilemma,” Noam Wasserman, 65% of startup failures are the result of disputes amongst cofounders. That’s significant, to say the least. Seed investors generally know that their investment comes with the expectation that they will back the investee by leveraging their own network to open doors, share their expertise and insights and, generally, support the investee company and its founders as needed throughout its life cycle.