- SearchVentures
- Posts
- Founders are leaving their startups
Founders are leaving their startups
Co-founder breakups are becoming common, the co-founder who left before the IPO disaster, and more...
SearchVentures
April 16, 2025
Founder exits are on the rise
More VC-backed startups are losing co-founders in the early stages than ever before, especially within the first three years of creating the startup.
What is driving this trend?
This Week’s Trends
Co-founder breakups are becoming common
The co-founder who left before the IPO disaster
Massive new €1.5 bn late-stage VC fund and more
Read Time 3 minutes
The Startup Trend
Co-founder breakups are rising
The data on 76,978 VC-backed startups shows that co-founder exits within the first 1 to 3 years have steadily increased across cohorts from 2016 to 2024.
> Startups founded in 2022–2024 are seeing the fastest early exits, with over 16% losing a cofounder within three years, up from 12% for the 2016 cohort.
> The 4-year mark remains a major drop-off point. For the 2017 cohort, 20.3% had lost a cofounder by year four, aligning with standard equity vesting periods.
💡 As startups now take longer to build, the question arises if the 4-year vesting period is outdated and if a 6-year structure is a better fit.
Startup Feature
The Co-Founder Who Left Before the IPO Disaster
Co-founders Brent Hoberman, Ning Li and Julien Callede
Made.com was once one of Europe’s fastest-growing online furniture startups. Headquartered in London, its direct-to-consumer model cut out retail middlemen and connected buyers directly with manufacturers.
In 2021, the startup was pulling in over £100 million in annual revenue and preparing to go public at a £775 million valuation. But just before the IPO took place, co-founder Ning Li stepped away from the business, selling his shares and cutting ties with the startup he helped build.
“I didn’t agree with the listing and how it was done. I had different views on the long-term strategy and how to build sustainably.”
What followed was one of the UK’s fastest startup collapses. Just over a year after listing, Made.com filed for administration. Its valuation dropped by 99 percent and the business was sold for less than £4 million.
Why Ning Li Walked Away from an IPO
Ning Li created Made.com in 2010 with co-founders Brent Hoberman and Julien Callede to fix what he saw as a broken furniture retail model. By selling online and cutting out showrooms and distributors, Made.com offered stylish furniture at lower prices.
The business model operated without holding stock, producing items only after they were ordered, which allowed it to scale without high upfront costs.
That lean model helped the startup scale rapidly across Europe and earned it backing from firms like Level Equity, Partech, and Highland Europe. But as the startup matured, internal tensions grew.
The board and executive team began pushing for a public listing and more aggressive expansion—both of which clashed with Li’s more measured vision.
“I would have waited. The business needed more time before going public, and I didn’t want to be part of something I couldn’t support.”
As Made.com prepared to list, Li clashed with other stakeholders over the timing and readiness for an IPO. He believed the business needed more time to mature. The disagreement led him to step down from the board and leave the business entirely.
Built for Scale, Pushed to Failure
Made.com went public on the London Stock Exchange in June 2021 with a valuation of £775 million. Initially, the listing was seen as a win for UK tech and a rare European ecommerce success story.
But cracks quickly appeared. Supply chain disruptions, rising return rates, and a shift in consumer spending hit the business hard. Made.com struggled with unsold inventory and falling margins. Within a year, its stock was down over 95 percent.
“It was heartbreaking to see something we built with care unravel so quickly.”
In late 2022, Made.com filed for bankruptcy and its remaining assets were sold to Next (a UK-based fashion and homewares retailer) for just £3.4 million. As a result over 400 employees lost their jobs.
For many in the ecosystem, Li’s early exit was a warning sign. The startup had strayed from its original model, lost its founder’s alignment, and pushed forward with an IPO before it was ready.
Sponsored by Ryse
Is this startup the next billion dollar buyout?
Imagine investing in Ring before its $1.2B buyout by Amazon
Or Nest, before Google's $3.2B acquisition.
By the time we hear about industry-changing companies, it’s usually too late. But right now, there’s a smart home startup making their way to homes in America. This tech startup is RYSE, and unlike Ring, you can still invest before their $1.90 round closes May 30.
Like how Ring disrupted home security, this company is revolutionizing smart blinds & shades.
With $10M+ in revenue, 200% YoY growth, and sold in 127 Best Buy stores, they are primed for massive expansion and forecast 5X in revenue this year.
Past performance is not indicative of future results. Email may contain forward-looking statements. See US Offering for details. Informational purposes only.
Headline News
This Week In Startups ✍️
Founders
> Pennylane, an accounting software unicorn, has raised €75 million in a funding round co-led by Sequoia Capital, Alphabet’s CapitalG, and Meritech Capital Partners.
> Nyobolt, a Cambridge-based battery startup, has raised $30 million months after warning it could run out of cash if it failed to secure extra funding.
> Synthesia, a UK AI unicorn, has raised a "strategic investment" from Adobe, as it surpasses $100 million in annual recurring revenue (ARR).
Investors & VCs
> Atlantic Vantage Point (AVP), previously known as AXA Venture Partners, is launching a first-time €1.5 billion late-stage VC fund.
> Wind, a European venture capital firm built and backed by entrepreneurs, has secured a €30 million commitment from the European Investment Fund (EIF).
> Matt Miller, a longtime partner at Sequoia Capital, is now raising a new $300 million fund that will focus on European AI and B2B startups.
Cheers,
Odin Lund & Hari Mohandas
Reply