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A lot of companies will start with a prototype by one person who raises a seed round and then takes on a “co-founder.” If you’re a one person operation and you’
by chatmasta 9y ago
A lot of companies will start with a prototype by one person who raises a seed round and then takes on a “co-founder.” If you’re a one person operation and you’ve managed to raise money, you need to hire someone anyway, so you may as well find someone who fits the bill of cofounder.
- super-serial 9y agoMight as well give them 50% stake in a company you built and might as well dilute your ownership? That makes no sense if you can hire someone to do the job, pay them X% more, and keep 100% ownership of your startup. I think the reason YC and other incubators want cofounders is because it hedges their risk. If one founder gets sick or goes against YC's advice they can apply pressure through the other founder, and in extreme cases team up with other investors to oust the bad founder. If it's a solo founder they own too much of the company to divide and conquer so they can't make any power plays. I'm not saying that these moves are always bad - in general investors want the company to succeed. They just rather have an option than to put all their eggs in one basket with a solo founder.
- chatmasta 9y agoIt's not about giving 50% of your company, and in a case like that the co-founder would definitely not get 50% (or deserve it from a risk/reward perspective). It's about having a partner and teammate who helps you accomplish more than you could alone.