Batman had Robin, Mario relied on Luigi, and Thelma had Louise. These famous duos relied heavily on their partners to get the most done. And so do most businesses; they only make it due to the winning strength of a powerful founder/co-founding team. Our CEO’s writing, how to find a co-founder, already tackles our most honest approach to the question of how to pick the best co-founder for a startup. For now, then, we’d like to dive into a few different questions on co-founders. These queries highlight the exact differences between founding teams and an investor or other business partners, and a lot more!
A co-founder is usually a very vital piece of a puzzle to get a startup off the ground. That is so much the case that picking a co-founder is more crucial than defining a company’s product. It’s even more critical than a final choice at insertion in a particular market or even choosing a potential investor! It’s genuinely that vital.
Unfortunately, most business people at first fail to know what’s truly needed to bring a company project to life favorably. It’s thus perfectly okay to want or need another person or people who can help fill the diverse needs of making a particular idea come true. Think of areas of expertise, for instance. And bring the perfect team together to be ahead of a given niche with leaders in a particular industry.
Competitors to a starting business might already have a great product and stable positioning before new business comes in, too. And new entrepreneurs with innovative ideas can profit from those with the most know-how to win battles and position victoriously. People can also just come into the startup game without knowing anything about doing business. That’s also very much okay. Yet, strong and knowledgeable connections are a must in those cases.
Ally with experts with much business background. Make sure they can step in and help a new company from straight failure. Make strategic business partnerships and other liaisons a real strength.
A few stellar companies didn’t ever need a co-founder to create a successful business. We’ll give you that. And there are high chances that highly effective people out there create and run a new business all on their own. In tech, in particular, people can have a great idea, execute it, and sell their creation - all by themselves. Those are exceptions, however—irregular and very singular cases.
In most scenarios, people with profitable ideas know they can sell their thoughts if they unite with other experts. Or they seek great people in their field for a healthy market insertion.
Even if a single person were to have the greatest of all ideas, someone alone doesn’t usually have all the necessary skills nor time to make it in business. That’s when a co-founder figure becomes crucial. Partners complete the necessary skillsets or even human resources to bring a business idea to fruition.
A founder is a person who has the initial idea and establishes a business. A co-founder is the one who goes along with that founder’s initial thoughts and helps make the new company flourish.
There might be cases in which each person in a starting duo is equal in terms of rights and obligations. Yet, each founder and co-founder’s role and responsibilities tend to be different to make the best of our starting group. Define those from the get-go. Divide chores and obligations based on each person’s strengths and skills and do so very clearly from the start.
Founders usually have a more active and decisive role in a given company. Employees, on the contrary, are hired and compensated for getting a specific job done.
Although our first team members can sometimes even get board seats and stock options as motivation, that’s not always the case. They’re valuable and crucial, but the legal implications are enormously different.
Founders are likely to own a large percentage of equity, for example, and they might or might not receive a salary at first. Early employees are luckily there for a company’s start. They run on a fixed salary and aren’t responsible for a startup’s ownership, direction, and overall operation.
An investor funds a company without necessarily being involved in its day-to-day activities and obligations. A co-founder is actively engaged in a company instead. They seek to make it grow and profitable and play a vital role in its daily operations.
Picking a co-founder is an essential task for most. It comes with research, thinking about our networks, and having difficult conversations to bring others on board. As we said, this process is just as or even more important than defining your product and picking a potential investor.
People who come together for a new company will most likely have worked together in the past. Or these can be people of a similar age range who share interests or visions in some areas. Those alone can get people to build a company together. In the end, we’re trying to find the correct fit to grow a successful business. We talk to these people, explain our vision and mission, and hope to bring them on for the ride.
Here are a few more answers to some relevant questions on finding the right co-founder for a new business.
You get to spend a lot of time with someone as a co-founder. Therefore, know which areas to discuss before building a startup with someone. Ask potential co-founders relevant questions that help you understand if this new relationship is beneficial and about to last long term.
For that, ask what potential candidates’ working styles and motivations are. Check if they can go unpaid if needed because that might be crucial during a startup’s starting stages. If they are, try to define for how long.
Find out what a person’s personal life looks like and what their core values are. You’ll need to see eye to eye on a few of these factors at the end of everyone’s string. Seek to know how they deal with conflict, too, and if they can give direct feedback. Also, find out about their ideal equity split whenever it comes to that.
All of the above areas are important check-in values for a suitable match.
You’ll need to decide who the new CEO will be. For that, ponder on that role for a considerable while. And remember, this person will be dealing with investors, the press, most business contacts, and public scrutiny. That includes news reports, official statements, company pitches, accelerator liaisons, board meeting representation, etc. That role will also be the first in charge of hiring talent and being the startup image when raising funds. Clarifying this aspect is vital to decide who the best CEO will be. And it should be easy to determine.
First, go for the person who can answer all the questions that the press, potential investors, and anyone interested in partnerships or sponsorships are most likely to ask. Get someone who can make decisions and fix problems quickly. Ideally, this person also has lots of energy and high interest in their role. More points apply if they’re also charismatic and charming. It sounds unimportant, but hopefully, the new CEO is very talkative to others on great terms. And an excelling representation of company culture and branding. A non-negotiable item is how this person truly needs to see and drive a business’ big picture, for example.
And finally, our last answer in this read. A co-founder agreement is essential to establish terms in a founder/co-founder team. It clarifies specific areas and business tasks and settles them according to a binding document we call an agreement.
Transport all your needs to that record to avoid misunderstandings. Include in it everyone’s company ownership percentage along with the names of everyone in the founding and co-founding team. Add company goals along with each person’s roles and responsibilities. And outline how you’ll make the most significant decisions. Include equity breakdown, salary, compensation, intellectual property, and exit clauses.
We hope this information has helped. Feel free to reach out to us in case you’d like to find out more.