Co-Founder: Good or Bad for Your Venture? How to Move Ahead Without One.

Ev Williams and Biz Stone, cofounders of Twitter

Ev Williams and Biz Stone, cofounders of Twitter

This is Post No. 6 in  How to Start a Business  Series.

The best co-founders are people you know from work, school or as old friends. Because two people working together should be emotionally compatible, same as people in marriage need to be.

When to Look for a Co-Founder?

1. If you already have a friend who is committed to start a venture with you, then go with her. But do not go scouting for a co-founder just for the sake of it.

2. If you are short on cash for outsourcing, then think about getting a co-founder for doing stuff that you will rather outsource.

3. If not having is seriously impacting your growth, then look around to find a co-founder.

4. If you are doing your second or third startup then it makes sense to bring a co-founder on board.

How Much Equity Should You Offer to Your Co-Founder?

Do not be greedy when offering equity. But don’t be a fool either. Offer it to your co-founder in proportion to the value she is bringing to the table. Also pay heed to at what stage she is joining at. If your co-founder is coming in at a time when there is nothing in terms of business – and you both are coming straight out of college. Then go for 50:50. If she is coming at same stage and less experience, connections and seemingly will have less contribution to make – then offer less than 50% equity.

If it is at the later stage when idea is done, and build up phase in on, after validation and concept – offer less than 25%.

How Many Are Too Many?

More than 3 founders are too much to start with. Historically two people have build large companies – see Google, Microsoft, Dropbox. That’s for a reason. People dynamics work better for 2 people than for 3 or more people when building a business.

Think about it – you need to decide on a name for your business. If only you are there. You can just decide it on the fly. Two people – some brainstorming and energy. If decision making us stuck – and you are like me you can toss a coin. But what when there are 3 people – then a simple act like deciding on a name can take more time. Time is money in a business – more so when you are starting up.

It also helps that if one founder has decision making power for certain area of the business.

Two over one has distinct advantages – because you can motivate each other and move faster forward with complementary skills. Three founder has no such advantages – unless you are doing a multi-locational startup which is a no-no to start with.

2 are good, 3 if you are starting a large project. More than that are not required.

If your business grows and you need more hands – hire employee/s (we will talk about hiring going forward).

What to Look for in a Co-Founder?

If you decide to work with co-founders then work with those who have complementary skills. For a web apps – the trinity of designer, developer and marketer works well.


Get an advisor. Pay if needed or offer stake. A advisor will be happy with a small equity stake – 1 to 5% and will bring a lot more value. A good advisor is someone with experience in similar industry and a person with right connections.

Go solo for your first business.  Chances are that you will be good doing it solo. For things you think you need a co-founder, you can also outsource those.  If this is your first business and if you already do not have plans of bringing people to run business with you – better start alone.

Now, decide and act.

Action for Today: Sit down and think – how do you want to move ahead – with or without a co-founder. This decision will be good action for today.  

Photo by Robert Scoble


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