Find a Co-traveller – Find a Co-founder
In my view, it is extremely helpful if you find a co-founder when starting an entrepreneurial venture. Apart from sharing the work and responsibilities, a co-founder can be the motivating companion and the emotional support that you will need when your business is going through a tough phase. And all businesses do go through a tough phase.
Also, a business needs different types of skills and competencies. The ideal composition of a founding team is when the founders bring complementary skills to the venture. E.g. someone from the marketing/brand management category, the fashion industry and an operations management/procurement person - will make an ideal founding team for an e-commerce startup.
Ideally, apart from people with varied skills and competencies, it is also useful to have a founding team, with different personality types – someone who depends on gut feel for decision making will find it extremely beneficial to have a co-founder who takes measured, well-thought out decisions, and vice versa.
Who exactly is a co-founder?
A co-founder is someone who has equal skin in the game, and has similar incentives to make the venture a success. Co-founders should feel the ‘ownership’ of the venture.
They may or may not have equal share of the equity in a private limited company or equal share of the partnership firm, but it has to be reasonably distributed. I.e. one person having 90% equity with two other people having 5% each does not make them co-founders.
Founding Team members are different from founders
Remember, not everyone who joins at the beginning of your journey needs to be a founder. They can be called ‘Founding Team Member’, and it does carry some weight in a person’s profile.
Founding team members are often the ones who are willing to take a bet with you, and hence expect to be rewarded with some equity (maybe 2-3%) so that they also get to benefit from the upside,if and when the startup succeeds.
On the other hand, a co-founder is someone who accepts the emotional and intellectual responsibility to convert the idea into a business, and who commits to live through the challenges that any entrepreneurial journey faces and who has a reasonable equity in the company ( let’s say about 20 % – 50%).
Composition of a founding team
In my view, it is critical to find co-founders who have the same passion for the concept, and who come from the same socio-economic background.
This is necessary, because when the startup is going through challenging times, it is tempting for someone who is less passionate about the subject, to step out.
Also, if the founders come from different socio-economic backgrounds, the challenging times can be quite stressful. Someone from a wealthy background may quit because neither is the challenge worth the effort, nor are the returns. On the other hand, someone who is financially constrained, may not have the ability to continue in a resource-constrained mode for longer than originally planned.
Finding a co-founder is pretty much like finding a spouse... at least in the sense of the seriousness and the thought that will go into the decision-making. And despite all the precaution and thought, there is no guarantee that things will work out well. You can only hope, and give it your best, assuming that the other person gives his/her best too.
Accepting someone as a co-founder is probably going to be one of the most important decisions in your entrepreneurial journey, and often in your life journey too.
A co-founder is NOT just another co-worker. Even if the share-holding is not equal among the founders, a co-founder is going to be an equal partner in the decision making, strategy planning, dealing with the challenges, carrying the load, putting a 100% into the venture, etc. The success or failure of a venture can often depend on the quality of the relationship between the co-founders.
Find a co-founder with similar aspirations and motivations. This is critical, and in my mind, a non-negotiable condition. People with differing levels of aspirations are likely to try and pull the company in different directions, as the startup progresses.
Find a co-founder that you will feel comfortable sharing your joys and sorrows with. Find someone who you can count as your friend.
Find a co-founder that your spouse is comfortable with. Especially, if the co-founder is of the opposite sex. Your spouse being uncomfortable with co-founders will not directly impact the company but could cause stress in your personal life. Avoidable.
Go by your gut feel. See if you feel nice about the person.
Most importantly, do not accept anyone unless you think that he/she is a GOOD HUMAN BEING. Everything else is secondary. If you have heard negatives on ethics, value-systems, social behavior, ideologies etc. – AVOID proceeding further. Do not get tempted by professional performance.
