4 ms·

After decades as an employee and cofounder, and seeing many startups fail first hand (so smaller data set, but much richer information) I agree that the stigma

After decades as an employee and cofounder, and seeing many startups fail first hand (so smaller data set, but much richer information) I agree that the stigma against single founders is in error. The number one and two causes of startup failure in my experience are fights between the founders and VCs forcing the startup to do the wrong thing (which often causes fights between the founders with one saying "we know the market better than those guys" and the other saying "but think of the signal if we don't pivot into widgets for baby monkeys and they decline to pro-rata our B round???!") But the bottom line is, if you don't know someone you can cofound with, you shouldn't jeopardize the future of the company by just picking one. I don't think you can pick a good co-founder with less than a year of experience with them. Founding a company strains previously good relationships by greatly raising the stakes for every decision and disagreement, compared to your previous relationship with each other. PG forcing Dropbox's founder to get a cofounder seems shockingly dangerous (unless that cofounder was really always going to be number 2 in authority). If you know someone you've worked with for 4-6 years and they work their butts off, then that's a great potential co-founder. I had one of those, but we got divorced. :-) Still on good terms, but I am not going to start a company with him. But if you don't have anyone like that- you're ADDING relationship risk to your Startup Risk. And you're unlikely to be reducing your startup risk by the same amount. That co-founder could be hired with a significant opportunity to earn equity, at about the same time, and be just as successful at reducing startup risk without adding the relationship risk by being an "employee". The difference is in control. So, my plan is to be the Founder, and then get a set of co-founders who get founder stock[1] but don't have the authority to overrule me, even if they all gang up (eg not an equal equity split). Hopefully this will be acceptable to TechStars. This will show others are willing to work on my idea at least- which is the claimed reason for a cofounder cause it's early social proof (also a really silly signal). [1] I don't believe in multiple classes of stock. A dollar put in by an employee from under market salary is just as valuable as a dollar put in by a VC firm, and the employee is taking more risk- they can only "invest" in one job at a time.

sportanova 10y ago
The "just a warm body, any warm body!" mentality is what's so detrimental about the co-founder craze. Both financially (~50% of equity!) and in terms of more risk. It's a bad idea unless they're at least as talented and motivated as you (preferably in an area that complements you), and even then it's dangerous because you give up a lot of control. If it's your idea and your vision, why not build the prototype, get some traction, then bring on a talented employee for 5% equity? Much better than 50% with someone you met at a "find a tech-cofounder" event
- api 10y ago
  Are there perhaps political reasons for it? Do investors prefer having two or more founders they can divide if necessary? Does it increase "bus factor" or otherwise derisk the venture? My opinion: two or more founders who are really invested and work well together > single founder > forced cofounder relationship. I say this as a single founder. The hardest thing about being a single founder is cognitive load. I don't necessarily mean time. There are usually enough hours, but switching between at least five hats really strains the brain. It can also be hard to maintain energy. I find groups with other founders and working in a good startup oriented coworking space very helpful.
  - 20yrs_no_equity 10y ago
    There are absolutely political reasons for it. Both the dividing founders reason you mentioned, plus the fact that single founders are more likely to be technical while when two people found one of them is likely to be a business founder. VCs feel they can control the business founder (or replace him if needed) much easier than the engineer, because VCs are not engineers. (and they are not entrepreneurs in my experience either, though they seem to think they are and are happy to trot out the "exits" they were vaguely involved in, usually via friends and family equity.) I agree with your priority- a pair of fully dedicated good founders is ideal.
- 20yrs_no_equity 10y ago
  I don't think its preferable to find a cofounder in an area that complements you. I think that this can be great, but what's most preferable is the right co-founder relationship. If the right co-founder is also an engineer, then that's fine. One of you should be CEO anyway, you can always hire business guys. I think the classic mistake startups make is the duo where ones "business" and ones "technical" and the engineer ends up spending all this time building the product and the business while the business guy takes the CEO spot and controls something he doesn't understand. (assuming it's a technical business, if it's a non-technical business like a sport drink then a business guy for CEO makes sense, as sales are step key operational effort)

sportanova 10y ago

The "just a warm body, any warm body!" mentality is what's so detrimental about the co-founder craze. Both financially (~50% of equity!) and in terms of more risk. It's a bad idea unless they're at least as talented and motivated as you (preferably in an area that complements you), and even then it's dangerous because you give up a lot of control. If it's your idea and your vision, why not build the prototype, get some traction, then bring on a talented employee for 5% equity? Much better than 50% with someone you met at a "find a tech-cofounder" event

api 10y ago
Are there perhaps political reasons for it? Do investors prefer having two or more founders they can divide if necessary? Does it increase "bus factor" or otherwise derisk the venture? My opinion: two or more founders who are really invested and work well together > single founder > forced cofounder relationship. I say this as a single founder. The hardest thing about being a single founder is cognitive load. I don't necessarily mean time. There are usually enough hours, but switching between at least five hats really strains the brain. It can also be hard to maintain energy. I find groups with other founders and working in a good startup oriented coworking space very helpful.
- 20yrs_no_equity 10y ago
  There are absolutely political reasons for it. Both the dividing founders reason you mentioned, plus the fact that single founders are more likely to be technical while when two people found one of them is likely to be a business founder. VCs feel they can control the business founder (or replace him if needed) much easier than the engineer, because VCs are not engineers. (and they are not entrepreneurs in my experience either, though they seem to think they are and are happy to trot out the "exits" they were vaguely involved in, usually via friends and family equity.) I agree with your priority- a pair of fully dedicated good founders is ideal.
20yrs_no_equity 10y ago
I don't think its preferable to find a cofounder in an area that complements you. I think that this can be great, but what's most preferable is the right co-founder relationship. If the right co-founder is also an engineer, then that's fine. One of you should be CEO anyway, you can always hire business guys. I think the classic mistake startups make is the duo where ones "business" and ones "technical" and the engineer ends up spending all this time building the product and the business while the business guy takes the CEO spot and controls something he doesn't understand. (assuming it's a technical business, if it's a non-technical business like a sport drink then a business guy for CEO makes sense, as sales are step key operational effort)