It’s a new year and you may be ready to pull the trigger on that new startup you’ve been dreaming about.
One challenge you may encounter in the beginning is finding your ideal co-founders. And you will definitely want to do this right. Investors will scrutinize your leadership team. And they see solo co-founders as a big red flag.
Many of your early employees may expect to be co-founders. But not every early contributor is co-founder material, so who is?
Here are the top four questions to ask yourself when looking for the ideal co-founders:
Have they done it successfully before? Not only should your co-founders have extensive experience at the helm of a company, but they should also have a strong track record of success. Think about where you want to be in five, ten or fifteen years. Perhaps you want to grow your business to a multi-billion dollar value or sell it one day?
You want people by your side who will help you impress investors and help your company reach those important milestones.
This may not seem easy (and it isn’t), but with the right intro and idea, you can get a highly experienced person interested in working with you.
For example, I’m good at business and product strategy, but I’ve never written a single line of code. So I knew I needed help. My brother introduced me through a mutual friend to my co-founder, Shay Litvak, who ticked all the boxes. Before working with me, he led a large engineering team for a publicly traded company, and before that he was part of the core team of a company that was acquired for $200 million. Absolute 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 want to make sure you do your due diligence first. If you plan to raise money, your co-founder(s) will 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 thrilled to put in all those extra hours and brainpower it takes 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 problems with them fairly quickly?
● Do they listen to you and consider what you say before disagreeing?
● Can you brainstorm with them without feeling embarrassed?
● And finally… do you enjoy being 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 probably aren’t the right co-founder for you.
Can they help you build a successful team? Ideally, your co-founders should each be able to build an entire division of your company – and do it well. While their performance speaks volumes about their leadership skills, equally important is how their employees feel about them. Why is that? Because happy employees do the best work. Point.
But how can you really tell if their employees enjoyed working for them? To ask. Don’t be afraid to make some calls to their previous (or current) team members to find out what it was like to work for them.
If previous employees are excited about it, that’s all the more reason to bring them on board. If former employees have mixed reviews, it doesn’t mean they can’t be a good co-founder. But it might be better if they co-founded someone else.
The point is, you want to make sure your employees feel good about coming to work. Your co-founder shouldn’t get in the way of you and a happy team. And in the perfect world, they’d help you build one.
What is the correct number of co-founders? There is no right or wrong number, but a solo founder will be frowned upon. My personal opinion is that the more the better. No matter how talented and resourceful you are, building a startup is much harder than you might imagine, and sharing the burden with multiple enthusiastic partners is critical to your success.
If you’re thinking about how many co-founders you should have and how you’re going to divide future responsibilities, your instinct might be to choose just one other person. However, in my experience, three co-founders are the sweet spot to get the strategic guidance you need and attract investors.
In our case, we worked with Amir Faintuch, our third co-founder. Amir joined as executive chairman, bringing experience and skills that neither Shay nor I had: scaling and leading a multi-billion dollar company (from startup to IPO).
Keep in mind that you can always add co-founders later. And you can promote employees to co-founders if the situation calls for it.
So start with the right people and build from there. You’ll be happy to have a caring partner you can call after midnight when you just can’t stop worrying about your product or tech stack.
And one last thing… Here’s my final piece of advice – just because someone appears to be the right co-founder doesn’t mean they are. Create a legal framework from the start that allows you to remove an inadequate co-founder. If a co-founder leaves, make sure that his equity interest reflects the contributions he made up to his departure. Standard four-year vesting with a one-year cliff is sufficient. And since you most likely haven’t yet proven yourself as a suitable co-founder, this acquisition should apply to you as well.