Let’s say you have a product ready to hit the market. But product development is one thing and marketing is something else. So, what do you do?
You will team up with someone else so to distribute the workload and create something stunning that people will want to buy.
While finding a suitable co-founder for your startup is a difficult task, you still need a co-founder to achieve success. Let’s learn how to find a co-founder who complements your skill set and can take your startup ahead with you.
But before we proceed further, let’s learn the difference between founder and co-founder for startup.
Difference Between Founder and Co-Founder, Employee, and Founding Partner
A founder is someone who is calling the shots alone in his startup. This means he has a team working under him on salary and no one shares the equity.
A co-founder is someone who is part of the founding team. He/she can be an investor and a co-founder or a skilled person working as a co-founder. The only thing that differentiates him from an employee is that he shares equity in the firm.
Here is how startup experts have differentiated between a startup founder and a startup co-founder.
Why Do You Need a Co-Founder for a Startup?
In most cases, a solo entrepreneur will have a hard time bringing success to his startup. He needs the help of skilled people who can manage different operations of the startup. For example, one founder can be good at management, while one can be good at product development. Similarly, one founder can be good at marketing, while another one can be good at programming. These are complementary skills and they are necessary to produce and market a product successfully.
Image of Bill Gate and Paul Allen – co-founders of Microsoft
This brings us to our next question…
At What Stage Should You Find a Co-Founder?
There is no fixed time as to when you should start finding a co-founder. You can even get one during the ideation stage, or you can get one when your product is out in the market and you are looking to expand. It all depends on YOU!
Startup experts advise that you should get a co-founder when you have the basics covered. This means you should:
- Have at least an MVP or at most a marketable product
- Know what type of skills can benefit your startup
- Have an idea about how much equity you can give the co-founder
- Have a fair idea about what you are bringing to the table
What to Look for in a Co-Founder?
Once you have a fair idea about your own strengths and weaknesses, make a rough sketch of traits you need in the co-founder.
1. Someone who mitigates risk
First and foremost, look for a person who can mitigate risks. Investors are always on the hunt for a co-founder for a startup who is tenacious and liable. But, even if you are not looking to raise investments soon, the traits still remain the same. Find co-founders who own the startup and can communicate confidently about their own shortcomings.
It is better to search for co-founders from different backgrounds. Don’t just rely on a single expertise such as ‘programming’, ‘management’ and so on. Instead, search for those who have a proven record of success with one startup.
2. Someone who helps you build
While you may want them to become a helping hand in your business, they aren’t just another employee. Find those co-founders who help you bring new elements to the business. Someone who is bold enough to inspire new ideas and pinpoint shortcomings in the current startup.
You need co-founders who not only reinvent the wheel but turn it into a derivable car.
3. Someone who helps you be In two places at once
Let’s say you have to attend a team meeting but there is an interview with this TV channel and you can’t miss it. Both are important for your product launch, what do you do in such a situation?
That’s where co-founders come in. One builds, the other one sells. Instead of getting a co-founder who closely matches your skill set, find one who is totally opposite to your skillset. If you are a developer, hire a marketer because this way you both can build and market the startup faster.
4. Someone who shows you a new perspective
Another reason to hire a co-founder is to see your startup (especially your product) from a different angle. In most cases, startup founders can’t find flaws in their products. It just doesn’t come to them that they can take a better approach to create the product. In most startups, the founders do a weekly meeting in which they cover the workings of the previous week and develop plans for the future. This also gives them the much-needed perspective to improve their products.
What Do You Need to Know About Co-Founders?
But before you go about searching for a co-founder, there are a few realities you need to understand.
1. One build, one sells
co-founders need to have complementary skill sets. If both are having the same skill sets, this means no one is bringing new things or ideas to the table. When the startup co-founders don’t bring anything new to the table, this eventually leads to a demise of the startup.
2. A marriage of minds
Think of adding founding members to your team as a marriage of minds. You need to compromise on some points just as you do in a real marriage to keep it alive. You also need to understand that this marriage is as important as your real life marriage because it is your BREAD and BUTTER.
3. Breakups are life-threatening
As mentioned above, the marriage of minds is important, what if things go south? Well, this can be life-threatening to you. Why? Because co-founders tend to manage a major stake of your startup. Letting them go can be devastating to your business.
Where to Find a Co-Founder?
1. Personal contacts
Look for co-founders within your personal contacts. How about your colleague who might be interested in a side gig? Or, your school friend who had an entrepreneur spirit within him? You can also search co-founder within your extended network. Let’s say the friend of your brother-in-law who is running his own software house. Or, start a joint venture with an active investor who might be interested in bringing in the money.
The whole exercise starts with you pitching your idea to them. No one will know what type of person you are looking for or what kind of help you want unless you brief them about the details.
Also, don’t forget to mention your idea to your team leads and managers. They might know people who will be a great fit as a co-founder.
2. Co-founder matchmaking sites
Another way to find co-founder(s) for your startup is via the crowdfunding websites like cofounderslab. You can easily find co-founders who will be interested in your business idea.
But with all the stereotyping attached with matchmaking sites, the big question is: Are they the right places to search for co-founders?
The answer is: Think of these apps and sites as a starting point for your co-founder hunt. Once you have some candidates, conduct their interviews in person or over the phone or on Skype, to know them better.
3. Social media groups
Next, search for co-founders on social media groups related to startups. You can find many experts who will be ready to be a part of your startup and lend their services for equity.
But just like matchmaking sites, you must be aware that there are many scammers on these groups and try to meet them in person before making any agreements.
4. Startup events and conferences
You can also find co-founders in startup events and conferences. If you are in a major city, finding startup events isn’t hard. They are happening twice every month, so finding a like-minded individual who is also interested in your startup isn’t so hard.
5. Job Listing Platforms
Another way to find co-founders is by advertising the position on job listing platforms. Some job listing platforms may not accept job posts without a described pay, but don’t worry about that because many job listing platforms exist.
You do need to mention what you will be offering to the co-founder in equity.
How to Pay the Co-Founders?
Most first time entrepreneurs often confuse WHAT and HOW MUCH should they pay the co-founder? It gets complex when an investor is part of the startup. There are two ways to pay a co-founder.
Paying through equity or salary to a startup co-founder is a rather tricky question. People have a mix of opinion about the two. Read what Tim has to say about the whole situation on cofounders lab.
But not everyone agrees with him. In fact, some say that payment for work and stake in the company are two very different things. Read what Brett has said about this as an answer to Quora question.
Let’s say you are paying through equity. Then the question of dividends and the amount of equity comes in.
- There is no hard and fast rule…
- It all depends on the value your co-founder will offer.
You can even pay him 20% equity in the company. But when you involve an investor you can’t make this decision alone because the investor is your sleeping partner. Indirectly speaking, he will be calling the financial shots not you.
If you are looking to pay the startup co-founder through a salary alone, then he isn’t a co-founder. Is he? You can call him a founding member of the team just like the early co-founders in Google. They did have a share in equity but they were simple developers and programmers doing what the co-founders of Google told them to do. In simple words, they were on a salary.
So, what do we perceive from it?
- Has equity in the company
- Should not only be an employee
- Should call the shots
Before we end, here are a few rules you should keep in mind. It is not that hard to find a co-founder for your startup. You should not think above expectations and don’t agree on more than you can safely offer the co-founder.
Finally, it is better to take more time to hire a co-founder than to hire one who doesn’t fit your business needs.
Have something to add to this article? Let us know in the comments below.
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