How to find the right co-founder
Choosing a co-founder is one of the most critical decisions you will make
My co-founders were introduced to me through a mutual connection. We immediately clicked as we all wanted to tackle the same problem!
And that was my first mistake. I fell in love with the idea, not my co-founders.
Love might be too strong of a word. There are many successful founding teams that maintain a healthy separation between work and life. Going into a multi-year journey with other people though requires a special level of commitment.
Some say that finding co-founders is like dating. Once you decide to work together, you have now “married” your co-founders.
Having co-founders can be a huge help, or a real headache
I think it is more like an arranged marriage. The objective is not love, but very practical concerns like starting a family, business relationships, or reputation & legacy. For founders, it is about increasing the odds of a successful venture.
Like any marriage, you want to work together and be aligned on fundamentals like vision, values, and life situation. For my startup, we all were onboard with the vision, but as we would soon learn, we were far apart when it came to our core beliefs, habits, life goals, and urgency to get things done.
We stuck it out to the very end, which seemed like a miracle. Most other startups inevitably face a situation where co-founders disagree or fall apart, leading to one or more co-founders leaving. In some cases, it leads to ugly founder divorces where lawyers get involved and litigation is possible.
The numbers vary, but an estimated 35% of startups experience a founder leaving and over 65% of startups fail because of founder conflict. If the point of getting a co-founder was to improve the odds of success, there numbers are not promising. In fact, it makes the case that perhaps going solo is a better path!
A lot of startup founders in fact opt to go solo. Often it is a matter of trust. Without anyone in their close circles that share their drive, passion, and vision, these founders prefer to build a team around them while maintaining more control, and providing more of a stake to early employees only when they have proven their capabilities and talent.
Being a solo founder however runs into a lot of resistance from potential investors. There is the stigma that they cannot build trust with and delegate to others. The biggest objections though are that solo founders take on too much responsibility leading to a greater likelihood of burning out and quitting.
Having co-founders does not eliminate burnout, but it certainly lowers the chances. But there are also the potential hassles of having to work with others if you are not closely aligned. So how do you go about the process of finding the right co-founder?
In talking with many startup founders, we developed an eight-point checklist to help you determine if someone is good potential co-founder match for you:
Source – Where do you meet co-founders? Is it an established program like Antler or Entrepreneur First, co-founder matchmaking sites like Y Combinator Co-Founder Matching, a co-founder speed dating event, a random startup meetup, or via a trusted connection? More curated connections yield more legitimate & serious co-founders.
Experience – Do you and your potential co-founder have similar levels of professional career and domain experience? It is OK if it differs, but too great of a difference can cause friction in terms of expectations in the speed of, how to get things done, and level of risk that you are willing to take as a team.
Skills – What are the strengths and weaknesses of each founder? Ideally your skills should complement your co-founder without much overlap. If you have big overlaps, there will be a tendency to step on each other. You want skills that mesh well as a whole, like technical & business or operational & strategic.
Values – What do each of you believe in? How do you operate as a person? What is your internal “why” that guides your life? Your values as a founding team will become the foundation for the startup culture, so make sure you are clear about values and understand what motivates each founder.
Lifestyle – Are you compatible in terms of wealth and economic safety? If one founder is jetting to Necker Island on weekends while the other is just scrapping by on ramen, that will eventually cause tension. Founders don’t have to have the same backgrounds, but they should not be so far apart in terms of economic means.
Drive – Startups are all about speed, uncertainty, iteration, high energy, and resilience. Co-founders should have that same level of insatiable desire to get things done fast. If they operate on different speeds, then one founder will feel like they are carrying the other, leading to conflict about workloads.
Passion – Similar to drive, but this is more about passion for the idea. How badly do you really want to solve this problem? Many co-founder splits happen because co-founder mostly went along with the idea rather than embrace it fully. You want a co-founder that will obsess on the idea for a decade.
Vision – Where do you see yourselves in a decade? What type of business do you want to build? What is the big change you want to make in the world and what legacy do you want to leave in this world? These are broad questions to help understand the deeper motivations of your potential co-founder and their “why” for doing a startup.
As you evaluate possible co-founders against this checklist, rate each category on a scale from 1 to 5 (1 low alignment and 5 high alignment). Once you have spent time to dive into each of these points, you can have a more thorough and data centric approach to choosing your co-founder.
It is also worth noting that we emphasize “co-founder”, not “co-founders”. If you’ve heard the phrase “two’s company, three’s a crowd”, the point is that the more co-founders you have, the harder everything becomes from decision making to communications to control. Start with one co-founder, and be wary of adding more unless it is a strong complement to the team.
What has been your experience finding co-founders? Are there traits not listed in the checklist above that helped you find a strong co-founder match? Let us know!
One of the biggest points of contention early on in a startup is how to split equity. At an event we recently attended in NYC about finding co-founders, the suggestion that co-founders split equity equally was not the best approach, especially if it is just two co-founders.
Why not a 50-50 equity split? It seems fair if both founders started together and are equally matched in terms of skills, passion, and drive. However, this causes potential issues later on when the founders are split on making key decisions. There needs to be an ultimate decision maker, a single person with the CEO title, and that is hard when the company is equally split.
So how do you ensure you are fairly allocating equity among your co-founders? There are a ton of useful resources to help you navigate this decision that we have sourced from other founders that approved of these sites:
How to split equity among co-founders from Y Combinator – Michael Seibel suggest equal or close to equal equity splits
How to Split Equity Among Co-Founders? from Antler – This is a much deeper dive into all the considerations of splitting equity
Co-founder equity split tool from Carta – You can also use this interactive guide to help you figure out the appropriate equity split
We do agree with Michael Seibel on the point that when you have co-founders, you are going to battle together. It is a long, hard journey as a startup team, so better to be more generous and fairer with equity with those you have trusted to join you on the journey.
This week concluded an amazing AWS Women’s Demo Week across 17 cities around the globe! Congrats to all the startup founders that pitched their startups and to all the investors that participated as speakers and judges for the demo events.
Mark attended the first Women's Demo Week session in Los Angeles this Monday, and it was truly awesome to experience the energy in person. We had five founders pitch; Anna Bofa of Crate, Kristin Grant of Westcott. Diane Strutner of Datazoom, Manuela Seve of Alphaa.io, and Melinda Wittstock of Podopolo. Thank you everyone that joined us for the event!
Awesome kickoff in LA for AWS Women’s Demo Week!
It is unbelievable that AWS re:Invent is only two short weeks away! This is the big, global annual event in Las Vegas for builders to hear about new product announcements, learn and gain hands-on technical skills, and connect with other builders. There is still room to join, but space is filling up (as are available hotel rooms) so sign up quick!