5 ms·

We really prefer at least two founders, but it's not a deal-breaker. We funded Drew Houston of Dropbox as a solo founder, but he got a cofounder before the bat

by sama 12y ago

We really prefer at least two founders, but it's not a deal-breaker. We funded Drew Houston of Dropbox as a solo founder, but he got a cofounder before the batch started. A bad cofounder is far, far worse than no cofounder. I'd spend maybe 20% of your time looking for a cofounder, and the rest on your business. But don't force a cofounder if you don't have a good, organic option. The more progress you make on the business, the easier it will be to get a great cofounder.

bhayden 12y ago
It seems like you really need to know the potential cofounder as a person, though, otherwise you won't be sure what they're like when stressed or making mistakes. Doesn't this limit it to people you already know fairly well?
- sama 12y ago
  Yes, you do. We always ask how long the cofounders have known each other.
- tomjen3 12y ago
  In need of a cofounder? Join the club. Or rather a club, where you will get to meet new people and, if you choose the right kind of club, get to see them in a high pressure situation.
mbym 12y ago
Very helpful, cheers. "The more progress you make on the business, the easier it will be to get a great cofounder" -- agreed -- and being accepted to YC would itself more than help convince people to join the team also :) I hope there are more Drew Houstons out there with confidence to apply.
- niche 12y ago
  Thanks sama and mbym. As a confounded solo founder waiting for organic cofundity, this is nice to hear.
tchock23 12y ago
I help out as a mentor at an accelerator in upstate NY. Unfortunately, we see solo founders rushing to find a co-founder just to go through accelerator programs. I wish your reply was shared widely with anyone applying to any accelerator anywhere...
- solve 12y ago
  (Most) accelerators are the problem here. They stack all the incentives on adding a cofounder no matter what, and none of those that I've closely known would stand behind the idea of "A bad cofounder is far, far worse than no cofounder." E.g. if your original cofounder leaves, they'll lay big penalties on you if you don't refill that seat immediately, even if it's bad for the company. What investors tend to leave out here is a real incentive for them, as a class. It's far easier to fire a founder if there's two. If there's two, it's often easy to make them turn on each other if they want one forced out. Forcing one of 2 out tends to be much less frowned upon, than kicking out the sole founding CEO and replacing him with outside management. Having 2 cofounders is big leverage for keeping the founders in line.
- davidw 12y ago
  I think of this concept as the 'cargo cult cofounder': http://journal.dedasys.com/2015/03/20/the-cargo-cult-cofounder/ http://journal.dedasys.com/2015/03/20/the-cargo-cult-cofound...
- RKoutnik 12y ago
  Would love to get in contact with you regarding Upstate NY accelerators - my email address is my username at gmail.
- devilddd 12y ago
  If i join u
downandout 12y ago
>The more progress you make on the business, the easier it will be to get a great cofounder. I am not trying to be pedantic...but are they really a cofounder if you've hashed out the idea and made progress on the business prior to their involvement? It's an important question in my mind, because a cofounder typically receives far more equity than virtually anyone else that becomes involved with the business after it is founded, and it also carries legal ramifications. I have personally been in a situation where I founded a company and created its technology, and when I needed money, someone volunteered to be my "cofounder". He eventually stole my IP, transferred it to a new corporate entity, sold it, and made more than $60 million. I wound up with nothing. While what he did was outright theft, I assisted him in it and made the legal battle infinitely more difficult for myself by declaring someone that clearly had nothing to do with founding the business a "cofounder" early on.
- AceJohnny2 12y ago
  Convincing arguments have been made that it's usually a better idea that co-founders get equal equity than not, to prevent arguments about said split which are much more likely to doom your startup. It's like that point about arguments in a relationship: would you rather be right or be together? http://avc.com/2011/04/how-to-allocate-founder-and-employee-equity/ http://avc.com/2011/04/how-to-allocate-founder-and-employee-... Edit: I see you added that second paragraph after I wrote this out. I'm sorry for your situation, that must've been horrible. However, it sounds like in that situation the toxicity of the co-founder is more to blame than any initial attribution or equity split.
  - kzhahou 12y ago
    Thanks for the link. > The founders should end up with about 50% of the company, total. Each of the next five layers should end up with about 10% of the company, split equally among everyone in the layer. This is the typical, and exploitative, arrangement in silicon valley! In today's climate, the founders often get money very early and start hiring right away. They have no real personal risk in the venture, and even if it fails completely their "founder" status will serve them well at the next go-round. The founders had an idea and some rough prototype, but the product is built and the company direction is executed by the next 10 people, and the next 10, and so on. But while the first 10 Employees get to share 10 percent of the company, they sit side-by-side with the 3 founders who have 10-20 times as much as any one of them. We all take it for granted that the founders' contribution should be worth so much more than mere employees. But who writes these blog posts on how to distribute equity, with 50% to founders and 10% to each "layer" after? Well, it's not the employees. It's the investors and founders themselves, who need to solidly stand behind the idea that at a company that faced failure every day and with every competitor launch and had to get every aspect right, in the end the people at the top should enjoy mega-riches and early retirement, while the lowly workers enjoy a nice bonus equivalent to a year or two salary. ---- If you believe in avc.com's guide of 50% to founders and 10% to each subsequent "layer", I would counter that the founding team is itself a layer, and each layer should be compensated equally. There is no justification for the first layer (founders) owning as much as the other layers combined.
vagab0ndk1ng 12y ago
Parker Conrad of Zenefits was also still a solo founder in his application video. If a founder intends to add a co-founder before the batch starts, how much does that impact your view on them as a solo founder during the application process?
- sama 12y ago
  Parker and I spoke about a cofounder then. He was very receptive to adding one, and that helped his case.
deleted 12y ago
[deleted]
graycat 12y ago
Sorry, my view is that a solo founder can be just fine. I'm a solo founder and believe I don't need and shouldn't want a co-founder. Here's why: The bottleneck in my project is just cutting my way through bad documentation -- all the rest, especially the crucial, core, secret sauce, original applied math, technical part along with typing in the code itself and getting it into good shape, has been fast, fun, and easy. A co-founder might be able to get Windows Server 2012 and SQL Server Enterprise Edition or some such installed and running quickly while I would have to do all the mud wrestling with wildly obscure and inaccurate documentation. Okay, but I really should, as is commonly said, know my business and, thus, should get SQL Server running myself, take notes, etc. And when I have good revenue, I will just call for paid support and get a tutorial, explanations for each step, corrections when the steps don't work, take notes again, etc. -- still no co-founder needed. But, again as founder and 100% owner, I need to "know my business". So, no matter how obscure the Microsoft documentation is for, e.g., how to get a connection string for SQL Server (took a week of mud wrestling, in the dark -- with clear and correct documentation I could easily have done it in 10 minutes), it's just work -- mud wrestling in the dark with alligators and poisonous snakes while being treated to a barbed wire enema and an unanesthesized upper molar root canal procedure while being poked two dozen times with a red hot branding iron -- I have to do. For a prototype or using lean development methodology, no thanks: I just wrote the darned code, wrote it as fully solid, production quality code, at least according to common standards for such code. I tested it, timed it, documented it. I was in a team at IBM that shipped IBM Program Product code (IBM's highest quality software category), and the code I've written for my startup looks as good as Program Product code to me. And I documented the heck out of the code because I know that if my startup works and becomes a big thing, then I will have to return to some parts of the code to put in tweaks for high scalability, e.g., for Web user session state, for a positive integer n, partition all the possible session state keys, each a GUID, into n partitions, have one session state server for each partition, and, then, in the server side code of a Web page, given a key, do a fast lookup to find the IP address of the session state server for that key -- simple code tweak, but, still, I want the code to be tweaked very well documented. Net, for the crucial, core work, I don't want to delegate it. So, no need for a co-founder. So, no risk of any co-founder disputes. So, get rid of one of the worst risks for a startup. If my startup works, then I will start to hire but not any co-founders. Instead, the first hire will be an office manager! She, likely a woman with a lot of social maturity and general business experience, will do the first interface to the phones, mail, e-mail, bookkeepers, accountants, lawyers, landlords, bank account, credit cards, expense accounts, the advertisers, billing, depositing checks, paying bills, record keeping, etc. As that job grows, she can hire assistants. Eventually her work will be that of the COO, CFO, and HR. She would be a candidate for one of those slots or just remain as my assistant or something else. Some of my work will become that of the CTO, e.g., run the server farm. And in time I will want a staff, e.g., to come up with ideas, study issues, propose solutions, present their work in papers and talks, etc. During the initial growth, I will be able to manage all that work because early on I will have done the first, small, beginning cases of all of it so know at least the first parts. But, during the growth, no one hire, if they left, could sink the company. The only key person in the company will be me. So, grow? Yes. Hire? Yes. Co-founder? No. E.g., I helped start FedEx, was right there, my office next to COB, CEO Fred Smith's. I saw a lot of how he did it and saved his company twice. He had no co-founder. This stuff about co-founders looks like something equity investors want: It appears that they want (1) a ready source of a new CEO if they don't like the current CEO, (2) want the power of a solo founder as the unique, key player diluted, and (3) want to be able to have more control over the company via divide and conquer among the co-founders. No thanks. The whole startup equity funding situation looks like very fishy business to me: So, clearly the way it works, nearly always, is, I do all the work to go from nothing to a product or service, with users or customers and revenue, and then someone with a term sheet and a checkbook might write me an equity check. But, as a solo founder, it won't take much revenue to make my little sole proprietorship profitable, a life style business. E.g., at current ad rates, keeping a $2000 server at my left knee busy sending Web pages can get me by far the nicest income of my life. Then, if the business is good, that is, lots of people on the Internet like my work, I'll have plenty of cash for organic growth without equity funding. If my business is not good, then I don't deserve equity funding anyway. Basically as a solo founder, I can't get equity funding until after I don't need it. But, I shouldn't much complain: US Main Street businesses, e.g., auto repair, restaurants, convenience stores, print shops, plumbers, electricians, HVAC companies, etc. don't get equity funding, and my information technology startup needs much less capex to start and opex to run than any of those Main Street businesses. So, what startups get offered and take equity funding? Maybe a promising startup with four founders, each with a maxed out credit card and a pregnant wife? I only have a debit card, no credit cards. I don't have a pregnant wife, don't even have a wife. So, maybe I'm seeing more reason to be a solo founder. > The more progress you make on the business, the easier it will be to get a great cofounder. Yes, and the less I will need a co-founder!

by sama 12y ago

bhayden 12y ago

It seems like you really need to know the potential cofounder as a person, though, otherwise you won't be sure what they're like when stressed or making mistakes. Doesn't this limit it to people you already know fairly well?

sama 12y ago
Yes, you do. We always ask how long the cofounders have known each other.
tomjen3 12y ago
In need of a cofounder? Join the club. Or rather a club, where you will get to meet new people and, if you choose the right kind of club, get to see them in a high pressure situation.

mbym 12y ago

Very helpful, cheers. "The more progress you make on the business, the easier it will be to get a great cofounder" -- agreed -- and being accepted to YC would itself more than help convince people to join the team also :) I hope there are more Drew Houstons out there with confidence to apply.

niche 12y ago
Thanks sama and mbym. As a confounded solo founder waiting for organic cofundity, this is nice to hear.

tchock23 12y ago

I help out as a mentor at an accelerator in upstate NY. Unfortunately, we see solo founders rushing to find a co-founder just to go through accelerator programs. I wish your reply was shared widely with anyone applying to any accelerator anywhere...

solve 12y ago
(Most) accelerators are the problem here. They stack all the incentives on adding a cofounder no matter what, and none of those that I've closely known would stand behind the idea of "A bad cofounder is far, far worse than no cofounder." E.g. if your original cofounder leaves, they'll lay big penalties on you if you don't refill that seat immediately, even if it's bad for the company. What investors tend to leave out here is a real incentive for them, as a class. It's far easier to fire a founder if there's two. If there's two, it's often easy to make them turn on each other if they want one forced out. Forcing one of 2 out tends to be much less frowned upon, than kicking out the sole founding CEO and replacing him with outside management. Having 2 cofounders is big leverage for keeping the founders in line.
davidw 12y ago
I think of this concept as the 'cargo cult cofounder': http://journal.dedasys.com/2015/03/20/the-cargo-cult-cofounder/ http://journal.dedasys.com/2015/03/20/the-cargo-cult-cofound...
RKoutnik 12y ago
Would love to get in contact with you regarding Upstate NY accelerators - my email address is my username at gmail.
devilddd 12y ago
If i join u

downandout 12y ago

>The more progress you make on the business, the easier it will be to get a great cofounder. I am not trying to be pedantic...but are they really a cofounder if you've hashed out the idea and made progress on the business prior to their involvement? It's an important question in my mind, because a cofounder typically receives far more equity than virtually anyone else that becomes involved with the business after it is founded, and it also carries legal ramifications. I have personally been in a situation where I founded a company and created its technology, and when I needed money, someone volunteered to be my "cofounder". He eventually stole my IP, transferred it to a new corporate entity, sold it, and made more than $60 million. I wound up with nothing. While what he did was outright theft, I assisted him in it and made the legal battle infinitely more difficult for myself by declaring someone that clearly had nothing to do with founding the business a "cofounder" early on.

AceJohnny2 12y ago
Convincing arguments have been made that it's usually a better idea that co-founders get equal equity than not, to prevent arguments about said split which are much more likely to doom your startup. It's like that point about arguments in a relationship: would you rather be right or be together? http://avc.com/2011/04/how-to-allocate-founder-and-employee-equity/ http://avc.com/2011/04/how-to-allocate-founder-and-employee-... Edit: I see you added that second paragraph after I wrote this out. I'm sorry for your situation, that must've been horrible. However, it sounds like in that situation the toxicity of the co-founder is more to blame than any initial attribution or equity split.
- kzhahou 12y ago
  Thanks for the link. > The founders should end up with about 50% of the company, total. Each of the next five layers should end up with about 10% of the company, split equally among everyone in the layer. This is the typical, and exploitative, arrangement in silicon valley! In today's climate, the founders often get money very early and start hiring right away. They have no real personal risk in the venture, and even if it fails completely their "founder" status will serve them well at the next go-round. The founders had an idea and some rough prototype, but the product is built and the company direction is executed by the next 10 people, and the next 10, and so on. But while the first 10 Employees get to share 10 percent of the company, they sit side-by-side with the 3 founders who have 10-20 times as much as any one of them. We all take it for granted that the founders' contribution should be worth so much more than mere employees. But who writes these blog posts on how to distribute equity, with 50% to founders and 10% to each "layer" after? Well, it's not the employees. It's the investors and founders themselves, who need to solidly stand behind the idea that at a company that faced failure every day and with every competitor launch and had to get every aspect right, in the end the people at the top should enjoy mega-riches and early retirement, while the lowly workers enjoy a nice bonus equivalent to a year or two salary. ---- If you believe in avc.com's guide of 50% to founders and 10% to each subsequent "layer", I would counter that the founding team is itself a layer, and each layer should be compensated equally. There is no justification for the first layer (founders) owning as much as the other layers combined.

vagab0ndk1ng 12y ago

Parker Conrad of Zenefits was also still a solo founder in his application video. If a founder intends to add a co-founder before the batch starts, how much does that impact your view on them as a solo founder during the application process?

sama 12y ago
Parker and I spoke about a cofounder then. He was very receptive to adding one, and that helped his case.

deleted 12y ago

[deleted]

graycat 12y ago

Sorry, my view is that a solo founder can be just fine. I'm a solo founder and believe I don't need and shouldn't want a co-founder. Here's why: The bottleneck in my project is just cutting my way through bad documentation -- all the rest, especially the crucial, core, secret sauce, original applied math, technical part along with typing in the code itself and getting it into good shape, has been fast, fun, and easy. A co-founder might be able to get Windows Server 2012 and SQL Server Enterprise Edition or some such installed and running quickly while I would have to do all the mud wrestling with wildly obscure and inaccurate documentation. Okay, but I really should, as is commonly said, know my business and, thus, should get SQL Server running myself, take notes, etc. And when I have good revenue, I will just call for paid support and get a tutorial, explanations for each step, corrections when the steps don't work, take notes again, etc. -- still no co-founder needed. But, again as founder and 100% owner, I need to "know my business". So, no matter how obscure the Microsoft documentation is for, e.g., how to get a connection string for SQL Server (took a week of mud wrestling, in the dark -- with clear and correct documentation I could easily have done it in 10 minutes), it's just work -- mud wrestling in the dark with alligators and poisonous snakes while being treated to a barbed wire enema and an unanesthesized upper molar root canal procedure while being poked two dozen times with a red hot branding iron -- I have to do. For a prototype or using lean development methodology, no thanks: I just wrote the darned code, wrote it as fully solid, production quality code, at least according to common standards for such code. I tested it, timed it, documented it. I was in a team at IBM that shipped IBM Program Product code (IBM's highest quality software category), and the code I've written for my startup looks as good as Program Product code to me. And I documented the heck out of the code because I know that if my startup works and becomes a big thing, then I will have to return to some parts of the code to put in tweaks for high scalability, e.g., for Web user session state, for a positive integer n, partition all the possible session state keys, each a GUID, into n partitions, have one session state server for each partition, and, then, in the server side code of a Web page, given a key, do a fast lookup to find the IP address of the session state server for that key -- simple code tweak, but, still, I want the code to be tweaked very well documented. Net, for the crucial, core work, I don't want to delegate it. So, no need for a co-founder. So, no risk of any co-founder disputes. So, get rid of one of the worst risks for a startup. If my startup works, then I will start to hire but not any co-founders. Instead, the first hire will be an office manager! She, likely a woman with a lot of social maturity and general business experience, will do the first interface to the phones, mail, e-mail, bookkeepers, accountants, lawyers, landlords, bank account, credit cards, expense accounts, the advertisers, billing, depositing checks, paying bills, record keeping, etc. As that job grows, she can hire assistants. Eventually her work will be that of the COO, CFO, and HR. She would be a candidate for one of those slots or just remain as my assistant or something else. Some of my work will become that of the CTO, e.g., run the server farm. And in time I will want a staff, e.g., to come up with ideas, study issues, propose solutions, present their work in papers and talks, etc. During the initial growth, I will be able to manage all that work because early on I will have done the first, small, beginning cases of all of it so know at least the first parts. But, during the growth, no one hire, if they left, could sink the company. The only key person in the company will be me. So, grow? Yes. Hire? Yes. Co-founder? No. E.g., I helped start FedEx, was right there, my office next to COB, CEO Fred Smith's. I saw a lot of how he did it and saved his company twice. He had no co-founder. This stuff about co-founders looks like something equity investors want: It appears that they want (1) a ready source of a new CEO if they don't like the current CEO, (2) want the power of a solo founder as the unique, key player diluted, and (3) want to be able to have more control over the company via divide and conquer among the co-founders. No thanks. The whole startup equity funding situation looks like very fishy business to me: So, clearly the way it works, nearly always, is, I do all the work to go from nothing to a product or service, with users or customers and revenue, and then someone with a term sheet and a checkbook might write me an equity check. But, as a solo founder, it won't take much revenue to make my little sole proprietorship profitable, a life style business. E.g., at current ad rates, keeping a $2000 server at my left knee busy sending Web pages can get me by far the nicest income of my life. Then, if the business is good, that is, lots of people on the Internet like my work, I'll have plenty of cash for organic growth without equity funding. If my business is not good, then I don't deserve equity funding anyway. Basically as a solo founder, I can't get equity funding until after I don't need it. But, I shouldn't much complain: US Main Street businesses, e.g., auto repair, restaurants, convenience stores, print shops, plumbers, electricians, HVAC companies, etc. don't get equity funding, and my information technology startup needs much less capex to start and opex to run than any of those Main Street businesses. So, what startups get offered and take equity funding? Maybe a promising startup with four founders, each with a maxed out credit card and a pregnant wife? I only have a debit card, no credit cards. I don't have a pregnant wife, don't even have a wife. So, maybe I'm seeing more reason to be a solo founder. > The more progress you make on the business, the easier it will be to get a great cofounder. Yes, and the less I will need a co-founder!