What happens to my equity after a mutual split?

Most UK founders operate under 'Good Leaver' clauses. According to standard British Business Bank guidance, this typically allows you to retain your vested shares while unvested options return to the company pool. Negotiating a clean break ensures your cap table rights remain intact for future exit events without lingering legal friction or disputes over your contribution.

How do I explain the departure to future investors?

Transparency is your biggest asset. Tell the truth: the vision diverged, or the runway necessitated a leaner structure. Investors at funds like Sequoia or YC value founders who make tough decisions early rather than letting a business bleed out. Focus on the data-driven reasons for the split and what you learned.

Should I sign a non-compete agreement?

Be cautious. While standard in the UK, non-competes must be reasonable in scope and duration (usually 6-12 months) to be enforceable. Ensure the carve-outs allow you to build in adjacent sectors. If you are joining Hypergility to build a new venture, clarity on your IP and freedom to operate is essential.

How do I manage my remaining runway?

Cash is oxygen. If you have departed with a settlement, treat it as your first pre-seed check. Minimise personal burn and skip the vanity office. Focus every pound on validating your next 'Problem-Solution Fit'. Statistics from ONS show that 20% of UK businesses fail in year one; liquidity gives you the time to pivot.

What are the tax implications of my exit?

If you are selling shares back, you may qualify for Business Asset Disposal Relief (formerly Entrepreneurs' Relief), potentially reducing your Capital Gains Tax rate to 10%. HMRC has strict criteria on owning at least 5% of the business for two years. Always verify your 'Leaver' status with an accountant to avoid a surprise tax bill.

for bold startups

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Mutually parted ways

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— Paul Graham, Co-founder, Y Combinator

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