If you’re starting to build a startup, one of the first things you’re probably thinking about is the question of whether you need a co-founder, and if so, how to find a startup co-founder…
But first: Do you really need a Startup Co-Founder? The Pros, Cons, and Middle Ground
You have an idea, product, or service that you think people would want to buy. Since you are running the business, the majority of the profits will flow to you. The simplicity of this process is what motivates thousands of people to contemplate starting their own company. However, what halts the majority of these people in their tracks is what comes next.
The initial idea of starting a business is simple.
However, once you start to explore becoming the founder of a startup or small business, you start to uncover all of the other moving parts that have little to do with your initial idea. This includes things like legal, logistics, startup costs, hiring employees for your startup, marketing campaigns, sales tactics, business plans, and more. Depending on what you are trying to launch, this may also include steps such as finding investors and technical work that you may know very little about.
It is difficult to enter the startup world for several reasons. Having a great idea is not enough. You may be required to navigate things like raising startup funding and pitching to angel investors. If your product revolves around a program, tool, or software, even if you don’t have a technical background, you will at least need to develop a general understanding of how to manage the technical aspects such as coding and web development. You do not need to have this knowledge when starting a company, but you should plan on figuring out a way to learn what you need to as quickly as possible.
What is a co-founder?
Before we even get into how to find a startup co-founder, let’s talk about what a co-founder is. A co-founder is someone who you start a business with. They are your partner in crime, so to speak. You might have the same idea for a business, but they usually bring different skills and knowledge to the table.
Founder vs. Co Founder: What’s the difference?
A co-founder is someone who helps to start a company with you. A founder is usually the person who started the company alone.
Can a company have more than one founder?
The answer is yes, a company can have more than one founder. However, how many founders a company has is not always clear. In some cases, a company may have two or more people who were equally involved in its creation and are considered co-founders. In other cases, a company may have only one founder.
Do you really need a co-founder?
Yes, most entrepreneurs need a co-founder, but some don’t.
You have to find a co-founder who has the skills you don’t. Once again, this is simple on paper, but complicated in real life. A co-founder is much more than someone who helps you tackle the things you don’t want to do. They become a partner in making your vision a reality. By taking on a co-founder, you are allowing someone else’s opinions to affect the direction of the idea that you originally came up with.
How to Find a Startup Co-Founder: The First Step
Before we dive deeper into the pros and cons of having a co-founder, you should understand one key fact that is often overlooked.
If you bring on a co-founder, there should be a motivating reason for them to be part of your company. Contrary to popular belief, they do not need to be as passionate about your vision as you are. They probably won’t be, and that’s ok. If you really think about it, to say that every founder needs to find someone else who is as passionate about their ideas as they are is really unrealistic.
What IS important is that they see your company as a vehicle to get them where they are now to where they want to be in their own path. Here are 3 situational examples:
#1 If an individual’s goal is to be an executive of a public company, then they might want to join a startup that has the goal of either going IPO or selling to a public company. Or, they could take the obvious route and work their way up the corporate ladder avoiding the startup scene entirely!
#2. If their dream is to cash out at a young age, they may look into joining startups with a strong exit strategy.
#3. On the other hand, if they want to be part of growing company where they can play an active role, make a big impact and enjoy a long and lucrative career, then their best option might be a lifestyle business, which is defined as a business set up and run by its founders primarily with the aim of sustaining a particular level of income and no more; or to provide a foundation from which to enjoy a particular lifestyle.
It is difficult to gain a complete understanding of someone’s motives or anticipate their behavior during a certain situation that may or may not arise. However, you can ask certain questions to determine their mindset and attitude towards becoming a co-founder. You can ask them to speak about their long-term goals and what they hope to achieve out of coming on board to join you as a co-founder. You can also inquire about whether or not they have been a co-founder before and what their processes are for dealing with issues and challenges.
The Main Reason Why You Need a Co-Founder
There are several reasons why you should consider bringing on a co-founder. But the most significant one is:
Sharing Key Responsibilities
A co-founder is someone that in theory can help you manage the day-to-day stress of running a company. When something goes wrong, there are now two minds working to fix it instead of just one. When a problem arises you may benefit tremendously from another set of eyes and different opinions. At times, you may be too close to the problem and suffer from clouded judgment. Your co-founder can prove an educated and unbiased solution that you may not have thought of yet. So are you think about how to find a startup co-founder, one question may be, “What kind of person could provide complementary skills and perspectives on this business?”
Advisors and employees can be beneficial when it comes to seeking advice and solutions. However, there are limits to what you can count on them for. For example, it is unreasonable to call an employee in the middle of the night about a high-level technical or logistical issue. Also, as a startup founder, you tend to use your employees as a sounding board for new ideas that are not fully formulated yet. They may be more inclined to take your ideas and run with them to make you happy instead of giving you the honest feedback you need.
A paid advisor’s main objective is to help you navigate the major problems that arise, not the everyday stuff. However, if they are not a paid advisor, their availability will be limited. Also, only a co-founder would be willing to split your start-up costs because they are expecting to be compensated on the back end.
A significant reason entrepreneurs bring on a partner of this magnitude is to impress or satisfy the investors they are meeting with. When you are asking a firm or individual to invest significant amounts of capital, you need to show you have covered all of your basis. Investors want to see that each area of your business will be managed by an expert. This helps mitigate the risk of failure and decrease the possibility of them losing their investment.
The Biggest Point of Consideration When Getting a Co-Founder
At this point, you may be thinking that bringing on a 50/50 partner to run your company is a no brainer.
If that is the case, it may surprise you to learn that a majority of high-potential startups fail due to conflict amongst co-founders.
Harvard Business professor Noam Wasserman studied 10,000 founders for his book “The Founder Dilemma” and found that over 65% of startups will fail because of issues over leadership, money, strategy, credit, and blame between feuding co-founders who cannot work together for the good of the company.
It’s a bit of a paradox when you come to think about it. On the one hand, we have investors who request your team with a co-founder to compliment your strengths. However, while that may work in the short-term, it appears that any benefit it brings may be washed out in the long-term. What is the point in appeasing an investor if the decision you make has the overwhelming risk of dooming your company forever?
If you feel strongly that you have a company you want to start and are not interested in having a co-founder, it is important to know you are not alone. Sarah Blakely is the founder of Spanx, a billion-dollar brand that sells sports apparel and intimate wear for women. She was able to secure the necessary investments and experience tremendous growth without the help of a co-founder. She followed a tried and true formula of crafting an idea, working hard, having a vision, and running her business with herself at the top.
If you did a Google search, you would find many successful entrepreneurs with stories similar to Sarah’s. The point is this: do not let anyone tell you that you need a co-founder to make your dreams a reality. If you find someone that shares your vision and you can get along with, then it is something to consider. However, do not force something to fit if it doesn’t just to appease an investor or check a box off your list.
Are you convinced that you need a co-founder? Here’s how to find a Startup Co-founder:
1. Define your ideal co-founder
Before you start your search for a co-founder, it’s important to have a clear idea of who you’re looking for. A big part of the question of how to find a startup co-founder is defining who you are looking for. What skills and qualities would they ideally possess? What kind of relationship are you hoping to build? Answering these questions will help you narrow your search and find someone who is a good fit for both you and your business.
2. Get connected
There are lots of ways to meet potential co-founders, but one of the best is through mutual connections. Ask your friends, family, and colleagues if they know anyone who might be a good fit for your business.
Join entrepreneur groups or attend startup events in your area to find like-minded people. In fact, that’s how I met my co-founding team member at FoundersGoHere.com!
4. Conduct a search
Use online tools and resources, such as FounderDating or CoFoundersLab, which which are dedicated to the question of how to find a startup co-founder and match startups with co-founders based on skills, interests, and location.
5. Stay open and alert
Keep your eyes open for potential co-founders in everyday life – you never know when you might meet someone who could be a great fit for your startup.
Whichever route you take, remember that finding a co-founder is a process, so don’t get discouraged if it takes some time to find the right person. And once you do find them, cherish and nurture that relationship – it’s essential to the success of your startup.
Create a co-founder agreement
Once you’ve found your perfect match, and you’ve decided move forward with a co-founder, it’s important to set clear expectations from the outset. What are each of your roles and responsibilities? What is your decision-making process? What role will each of you play in the executive team? How will you handle co founder conflict? Having a clear understanding of these things can help avoid messy situations down the road.
Put everything in writing.
It’s always a good idea to have a written agreement in place with your co-founder. This can help prevent misunderstandings and protect both parties in the event that something goes wrong. The agreement should include things like ownership percentages, decision-making authority, and how profits will be divided.
Have a trial period.
This can help you get a better sense of how well you work together and how well your skills complement each other. It can also help identify any potential red flags that might arise down the road.
Even if you’ve found the perfect co-founder, it’s important to remember that things can change over time. Be prepared to adjust your agreement as needed to reflect these changes in order to have the best chances for your company’s future.
Sarah Blakely’s story is proof that you don’t need a co-founder to build a successful business. However, if you do decide that you want one, there are some steps you can take to find the right person for your business. First, define your ideal co-founder and get connected with people who might be a good fit. Then, network with other entrepreneurs and use online resources to conduct a search. And finally, remember to stay open and alert for potential co-founders in everyday life. Once you’ve found the right person, put everything in writing and have a trial period to see how well you work together.