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How and when conflicts among co-founder entrepreneurs lead to their exit intentions

06/22/2026

5 min

Conflicts can arise among the founders of a company, whether it is a start-up or not. How can we ensure that these conflicts do not jeopardize the company? Are certain types of disagreement more likely than others to cause difficulties for the company? And how can disputes be effectively resolved?

Ventures led by a team generally outperform solo ventures in terms of profitability, growth and overall success. However, despite their potential, they remain vulnerable to failure due to co-founders leaving. Nearly 40 percent of entrepreneurial teams see at least one of their members leave the venture within five years.

Whilst the departure of some co-founders may have limited consequences, or may even prove beneficial in certain situations, the departure of a co-founder who possesses knowledge, unique entrepreneurial skills or contacts that are essential to the business may result in the loss of such resources and thus undermine the firm’s competitive advantage, growth or even its survival.

Study in Pakistan

Despite their significance, relatively little is known about the factors leading to the breakdown of entrepreneurial teams, the reasons why co-founders leave, and how to prevent such situations. Our study in Pakistan examined how and when different types of conflict among co-founders influence their intention to leave the company.

Conflict is a natural product of social interactions, characterized by disagreements or interpersonal incompatibilities arising from differences of opinion, conflicting wishes or desires, and personality clashes.

Start-up teams often bring together people with complementary skills, expertise and experience. This diversity can be a source of creativity, innovation and effective decision-making. However, it can also lead to disagreements over priorities or strategic choices, or even the future direction of the business – thereby increasing the likelihood of conflict among co-founders.

Furthermore, unlike teams in more established companies, start-up teams operate in a working environment that can be highly stressful, characterized by limited formal supervision, poorly defined role boundaries, heavy workloads, as well as frequent changes to objectives, strategies and individual responsibilities. All these characteristics can increase uncertainty and conflicts.

An underestimated risk?

Under such conditions, conflict can become an inevitable aspect of entrepreneurs’ day-to-day interactions. This conflict gives rise to tensions and incompatibilities within the group of co-founders and can even undermine the well-being of the entrepreneurs. Therefore, it is a critical but often underestimated threat that not only impairs team cohesion but also heightens some entrepreneurs’ intentions to leave the startup.

Three main types of conflict can be identified:

Task conflict refers to disagreements over the content and the final outcomes of tasks. For instance, when co-founders disagree on the firm’s strategic direction, such as whether to prioritize rapid growth or product quality.
Process conflict concerns disagreements about how tasks should actually be carried out. This may include disputes over logistics, roles and responsibilities, timelines, or even founders’ decision-making authority. For example, two entrepreneurs may disagree over who should lead a project or how to divide tasks.
Relationship conflict is the interpersonal incompatibility among individuals due to differences in personalities, communication styles, or values (cultural, religious, political, or personal). For instance, when co-founders’ communication styles, personalities, or values clash, mutual dislike can develop, leading to personal tensions and frequent confrontations.

The role of negative emotions

Our research, based on a study of 178 entrepreneurs in Pakistan, investigated how and when these conflicts can lead to founders leaving the venture by examining the mediating role of negative emotions (e.g., anger, fear, guilt, and frustration).

We then examined the buffering effect of entrepreneurs’ emotional intelligence (EI), which can be defined as the ability to manage one’s own emotions as well as those of others.

Our findings revealed that not all conflicts affect entrepreneurs’ exit intentions equally. For example, task and process conflicts do not directly drive entrepreneurs’ intention to leave the company. However, they can provoke negative emotions that increase the likelihood that founders will leave the venture. In contrast, relationship conflict directly increases co-founders’ exit intentions, with negative emotions further amplifying this effect.

Importantly, our study confirmed that emotional intelligence helps entrepreneurs regulate their negative emotions during conflicts, reducing negative affect and, consequently, lowering entrepreneurs’ intentions to leave the venture.

This underscores the significance of interpersonal dynamics and emotional skills for the sustainability and success of new ventures. It presents several actionable recommendations for start-ups, incubators, and entrepreneurial ecosystems in Pakistan, France, and beyond.

For example, our findings suggest that,

For incubators and entrepreneurial training programs, it would be a good idea to try to equip founders with the tools to distinguish among conflict types and respond to disagreements constructively rather than emotionally. For example, disagreement over which customer segment to target or which product features to prioritise reflects task conflict and can be addressed through evidence-based discussion; whereas frustration over a co-founder’s communication style, such as feeling ignored or criticised, reflects relationship conflict and calls for listening and clarifying expectations rather than debating facts.
These training programs should also include workshops on emotion regulation and resilience to help entrepreneurs mitigate the adverse effects of conflicts. Teaching confounders how to manage negative emotions can help reduce impulsive or avoidable exits.
More broadly, emotional intelligence should be treated as essential as cognitive intelligence in entrepreneurial education. Business schools and incubators should integrate EI training into team building and leadership development.
Cofounders can assess emotional competencies when forming teams and engage in EI coaching or reflective exercises to prevent destructive conflicts and premature exits.
When creating their startup team, founders can clearly outline and agree upon emotionally respectful offboarding procedures and conflict-resolution timelines to minimize impulsive exit decisions that could endanger the venture.

Our study, therefore, highlights that although conflict is inevitable in start-up teams, the way emotions are managed can determine whether it becomes a source of innovation or disintegration.

This is the English version of an article originally published by Rahman ULLAH from IÉSEG in French on the Conversation France.