I was reading a great article “Please, please, please stop asking how to find a technical co-founder” by Jason Freedman. Which prompted me to start writing this.
I’ve always wanted a business partner and co-founder.
When you look around at super successful startups they have co-founders. Google – Larry Page and Sergey Brin. Apple – Steve Jobs and Steve Wozniak. Twitter – Biz Stone and Evan Williams. Microsoft – Bill Gates and Paul Allen. I know a lot of successful entrepreneurs that don’t have cofounders or partners — and many of them have said they like making all the decisions, they don’t want to share the equity in the company, it’s less expensive to just hire contractors and employees, Co-founders complicate things. There is truth to all these things. However, I think there’s a bunch of pros too.
A Single Founder: Why Start with Such a Tremendous Handicap?
Drew Houston, Dropbox co-founder & CEO, said in this Quora post:
“My favorite analogy for one founder vs two or more is that it’s possible to raise a child as a single parent, but vastly more challenging and personally taxing to get the same outcome. Not only that, but in this case you’re effectively competing against conventional teams that have more than one founder. Startups are risky enough — why start with such a tremendous handicap?”
The upside of having a co-founder can be huge. The obvious reason are you can get a lot more done if someone else is able to do a lot of heavy lifting and without the hand holding an employee requires. There’s also skill sets that the co-founder should have which are not a duplication of your own. Complimentary skills are ideal — one person has strong sales and marketing skills and the other has strong technical skills. It’s also great to have someone that you can bounce your ideas off of instead of making decisions in a silo. It’s also important to have a co-founder that is supportive — things go wrong both professionally and personally. A great co-founder is going to be one that can help keep you from falling off the rails. All these things are well worth giving away equity and sharing in the upside.
I had a conversation with Arry Shin, COO and Co-founder of All Things Wishful. We had a great conversation about finding co-founders and some of the challenges that come with it. I asked Arry how she and Mina Yoo her co-founder came together to form their startup and it actually started with friendship first and a couple startup ideas later they settled on All Things Wishful.
Co-founders Dealing with Disagreements
Let’s face it, when building a company with another person you’re not going to see eye-to-eye on everything. Sure it’s going to be great when you can celebrate the wins together, but, there’s also going to be heated discussions and you’re going to have a bunch of disagreements. I asked Arry how she deals with disagreements and she said her and Mina have had their fair share of but they also have agreed to always come back within 24 hours and talk things out. The have three words that they use together:
I would find it pretty hard to not get past those disagreements if the founders shared those kinds of core values. In the past, I’ve had managers tell me “let’s agree to disagree”, that kind of works but I think that’s more for boss/employee relationships not co-founder relationships. You can appreciate different viewpoints but that doesn’t mean you have to respect or love the person for it. I would really like to hear from other co-founders how they deal with disagreements — got some thing you can share?
How Do You Know If The Person You’ve Met is It
I spoke with another entrepreneur and thinkspace member today on this topic and he asked me “Would you be able to give this person equity in your company?” Without hesitation I said “Yes”. I think that pretty much answers how I feel. My personality type is one where I need to get to know someone for a while and be able to experience some up’s and down’s before knowing whether or not we’d be good at being partners. Here’s three other ways you can know:
- Bring the person on as an employee and if perhaps they will exhibit they can think more like a founder than an employee.
- Start doing business with that person. You can revenue share, you can work side-by-side with that person for a period of time. After the trial period, you can then feel confident about being business partners.
- Ask the person to be on your advisory board. This will also give you a feel for how you can work and communicate with that person.
Write a Bullet Proof Partnership Agreement
For a million different reasons, a perfect partnership may come to an end. What are some of the things that you can think of to create a bullet proof partnership agreement? Some questions to come to agreement on are:
- Performance standards should be the same for co-founders as non-owner employees.
- Co-founder disputes should be handled in a predetermined manner so as to not inhibit operations.
- The business has contracts that protect it from the divorce, death, or disability of the co-founders.
- Have buy/sell agreements in place.
Other Questions to Ask Your Co-founder
- What is their level of commitment?
- How deeps is their experience?
- How well do you work together?
- Are they in it for the long haul?
What else is there to think about? Please share!