Often when entrepreneurs have a strong desire to help others grow and change workplace conflict is like being in a battle zone. There are no b boundaries and anything goes.
Here you need to take the RULE OF THREE to heart. If by the time you need to go over the same retread territory and there is no viable change, then next level action is required. Don't wait. Waiting will only cause the distress to fester and you can end up losing some of your key employees. Then you will be left with the jerk that caused all the problems and the two of you will be looking at both empty offices and empty financial accounts.
Check out the book "The No-Asshole Rule" by Robert Sutton, professor of management at Stanford University. He challenges us to make sure that the work environment does not become a depressing place filled with disrespect, lying, rudeness, and power games by looking the other way.
Continued bad behavior, like any other form of addiction has no place in the work setting. Here it is vital for leaders to listen, ask questions and then take action. People need to be heard and respected in getting out their side of an issue, just as you too have a right to your say.
However, if there is no willingness to do things differently, to stay positional, to prove the other guy wrong, more explicit action is needed.
Just remember the rule of three; it will never disappoint you in the long run.