Cookies was a Germany-based peer-to-peer payments app, cofounded by Lamine Cheloufi, as head of product, and Garry Krugljakow, as head of business. In November 2015 the company raised $1.6 million, and by the summer of 2016 it had officially launched.
What followed was fast. According to TechCrunch's reporting on the company's collapse, a pressured product launch and stalled fundraising conversations put pressure on the founding relationship, and the two cofounders fell into a dispute. The company's board, which included Cheloufi and an activist investor, voted to remove Krugljakow from management. Krugljakow contested the decision; lawyers got involved on both sides, and, in TechCrunch's words, the process dragged on, leading to a complete deadlock.
The deadlock did not stay contained to a governance dispute. Cookies had a funding round in progress, and closing it required every shareholder to sign off, including the cofounder the board had just voted to remove. The ownership dispute and the company's need for cash became, as TechCrunch described it, intrinsically connected in a vicious circle: the round could not close while the dispute was unresolved, and the dispute had no mechanism forcing a resolution while the company still needed the round to survive.
Cookies filed for bankruptcy only a couple of months after its official launch, the collapse attributed to the combination of the cofounder dispute and the funding it had frozen.
It's clear that nobody was right in this situation, and that the board should have thought this through before leading the company to a dead end.
What founders can learn from this
Of the disputes in this series, Cookies is the sharpest illustration of one specific gap: the company had funding, a product, a launch, real structure, and still had no pre-agreed mechanism for what happens when its two cofounders reach a disagreement neither side will back down from. That is exactly what a deadlock clause exists to prevent, not by guaranteeing the founders agree, but by guaranteeing that a disagreement has a defined way to resolve, on a timeline, instead of an open-ended standoff a funding round cannot survive. What is a deadlock clause covers how that mechanism works.
The second gap is about departure. A board voting to remove a cofounder is not unusual; difficult situations sometimes call for exactly that. What turns a removal into a company-ending deadlock is the absence of agreed terms for what happens next: what the departing cofounder keeps, what they are owed, and, crucially, whether their continued cooperation, like signing off on a funding round, is still required after they have been pushed out. Good leaver vs. bad leaver and how to break up with a cofounder both cover terms designed to prevent exactly this: a departure that leaves the company legally unable to move without the person it just removed.
Cookies had raised real money and reached an actual launch, further than many startups get. It is a reminder that structure and funding do not substitute for the specific mechanism a deadlock requires. Without it, a single unresolved disagreement can freeze a company that would otherwise have kept going.
Sources: TechCrunch.