It’s a new year, and you might be ready to pull the trigger on that new startup you’ve been dreaming about.
One challenge you may encounter early on is finding your ideal co-founders. And, you’ll definitely want to get this right. Investors will scrutinize your leadership team. And, they view solo co-founders as a major red flag.
Many of your early employees might expect to be co-founders. But, not every early employee is co-founder material–so who is?
Here are the top four questions to ask yourself when searching for the ideal co-founders:
Have They Successfully Done it Before? Not only should your co-founders have ample experience at the helm of a company, but they should also have a strong track record of success. Think about where you’d want to be in five, ten or fifteen years. Perhaps you want to grow your business to a multi-billion dollar valuation or sell it one day?
You want people alongside you that will help wow investors–and help your business reach those important milestones.
This might not seem easy (and it isn’t) but with the right intro and idea, you might get a highly accomplished person interested in working with you.
For example, I’m good at business and product strategy, but never wrote a single line of code. So, I knew I needed help. My brother, through a mutual friend introduced me to my co-founder, Shay Litvak, who checked all the boxes. Prior to joining forces with me, he led a large engineering team for a public company, and before that was part of the core team at a company that was acquired for $200M. Definitely co-founder material, and, as it turned out, he was also ready to move on to the next challenge and join as Chief Technology Officer.
You’ll want to make sure to do your due diligence first. If you plan on raising money, your co-founder(s) need to bring both clout and expertise that you don’t have.
Can They Be Your Friend? You and your co-founders will be spending a lot of time together and if you don’t enjoy each other’s company, you won’t be excited to put in all those extra hours and brain power needed to make your startup a success
That doesn’t mean you’ll never have a conflict with your co-founder(s). That can happen in any friendship. But, ask yourself this:
● Can you solve issues with them pretty quickly?
● Do they listen to you and take what you say into account before disagreeing?
● Can you brainstorm with them, without feeling embarrassed?
● And finally…do you like to be around them?
Pay attention to how you feel when you’re with your potential co-founders, and listen to your gut. If you don’t click, they’re probably not the right co-founder for you.
Can They Help You Build a Successful Team? Ideally, your co-founders should each be able to build out an entire division of your company–and do it well. While their accomplishments speak volumes about their leadership skills, equally important is how their employees feel about them. Why is that? Because happy employees produce the best work. Full stop.
But how can you really tell if their employees liked working for them? Ask. Don’t be afraid to set up some calls with their previous (or current) team members to find out what it was like to work for them.
If previous employees rave about them, that’s one more reason to bring them on board. If former employees have mixed reviews, that doesn’t mean they can’t be a good co-founder. But it might be better if they are someone else’s co-founder.
The point is–you want to make sure your employees feel good about coming to work. Your co-founder shouldn’t stand in the way of you and a happy team. And, in the perfect world, they’d help you build one.
What’s The Right Number Of Co-Founders? There is no right or wrong number, but a solo founder will be frowned upon. My personal view is that the more the better. As talented and resourceful as you are, building a start-up is a lot more difficult than you may imagine, and sharing the burden with multiple enthusiastic partners is critical to your success.
As you think about how many co-founders you should have—and how you’ll split future responsibilities, your instinct might be to choose just one other person. In my experience, however, three co-founders is the sweet spot for getting the strategic guidance you need and attracting investors.
In our case, we partnered with Amir Faintuch, our third co-founder. Amir joined as Executive Chairman, and brought experience and a skill set that neither Shay nor I had—scaling and leading a multi-billion dollar company (from startup to IPO).
Keep in mind, you can always add co-founders later on. And, you can promote employees into co-founders if the situation calls for it.
So, start out with the right people, and build up from there. You’ll be happy when you have a caring partner you can call after midnight when you can’t stop worrying about your product or tech stack.
And One More Thing… Here is my last piece of advice—just because someone seems to be the right co-founder, doesn’t mean they are. Create a legal framework from the get go which allows you to remove an inadequate co-founder. Make sure that if a co-founder leaves, their equity stake reflects the contributions they’ve made up until their departure. Standard four-year vesting with a one-year cliff will do. And, since you most likely haven’t proven yet that you are an adequate co-founder either, this vesting should apply to you as well.