The search for a co-founder is often likened to the pursuit of a romantic partner.
In both senses you’re looking for someone who understands you, shares your core values and wants to find their happily ever after.
Building a business will never come without its challenges- but sharing your startup journey with a co-founder can help to make the startup years less lonely.
If you’re a startup founder looking for someone to join you in your journey, there’s a lot to consider. Take time to think about what you want from a co-founder and what skills they will need to bring to the table.
Finding your perfect match may take a while- but don’t let this push you into bad relationships.
Some decisions are just too important to rush.
Why are co-founders important?
Data suggests that it takes on average 3.6 x longer to scale if you’re a solo founder.
This isn’t to say that it’s impossible to go at it alone, but that having someone there in your early days to help cover all the roles is helpful.
But what are the basic roles you’ll need to cover?
In our Talent Guide for Founders we break down the three essential roles as hipster, hacker, and hustler.
Your hipster is a designer, their job is to make things look great. They’re all about the customer perspective, or the user experience, and making sure the frontend looks and feels the way it should.
Your Hacker might be an engineer, with more of a focus on developing and building your product.
Your Hustler is someone with business sense, who’ll drive sales, raise money, and be the face of your company.
Some founders find themselves encompassing all three roles, whilst others split it between co-founders.
What is the difference between a co-founder, and an early employee?
It’s often wrongly assumed that a co-founder has to be part of the initial idea or vision stage. But in reality, sometimes a co-founder will come aboard a little later down the line.
The main difference between a co-founder and an early employee comes down to equity and salary. A co-founder will be offered an equity split and in a lot of cases works with no salary in the early days- and it’s not uncommon for them to put their own money into the company.
They will have more of a role in key decision making and more involvement in funding rounds and investor conversations.
An early employee may also have involvement in decision making, but will sign an employee contract, and whilst they may be offered options or shares, they will be paid a salary.
How much equity should I give my co-founder?
Depending on when your co-founder joins you on your journey, deciding on a fair equity split might be tricky.
You might find that you and your co-founder carry out a fairly even split of the work and a 50/50 equity split makes the most sense.
But sometimes one founder might put in significantly more hours and personal investment. In this scenario a 50/50 split might not be as suitable.
When splitting equity you should consider:
Responsibilities and time commitment
Level of risk involved
Personal money invested
It’s also suggested that some investors will look down upon a 50/50 spilt seeing a lack of a strong leader or decision maker. A 45/50 split might work more in your favour- with the 5% going to the founder who had the initial idea.
And if you have 3+ co-founders then the split will adjust accordingly. Reach out to an advisor or mentor to help answer any questions- or even using a tool like the Startup Equity Calculator can be useful.
At what stage in my startup growth should I find a co-founder?
Annoying as it is, there’s no right or wrong answer to this question. Every startup is different, and every founder works differently.
If you feel like you’re largely fine going it on your own but lack in a certain area, a co-founder isn’t your only option. Consider reaching out to freelancers or outsourcing until you have the inhouse capacities.
There are also many advisors or mentors who work with founders and are well-placed to support you on your journey.
If there’s one thing that we’ve learnt from working closely with founders, it’s that you’re not alone in the struggles you face.
How to find the right co-founder for your business
The key to finding your co-founder lies in your network.
And this doesn’t have to be a formal network, it could be old classmates, college or university friends, sports teams etc. Working with someone you know can help alleviate some of the risk.
If your network isn’t landing you the match you’re looking for, leverage your networks’ network- like dating a friend of a friend.
It can be nerve-wracking to put yourself out there, but start making connections with relevant people, attend events and use social media to your advantage.
You’re looking for someone who shares the same core values as you, and is willing to put the work in to bring your idea to life.
How to end a bad relationship with a co-founder
Everyone is looking for their happily ever after. No one enters a relationship thinking it will end and many startups have been driven to the ground from the fallout of founder relations.
One way to combat this is to have important conversations around different scenarios- what might happen if one person quits early on? How will you allocate any value created up until this point?
You might not draw up a formal contract, but having these conversations about what you would do if things go sour, before things go sour, will help down the line.
Every co-founder relationship is different and comes with its own challenges. But it’s time to get yourself out there and find your happily ever after.