At Intelectium, we are clear that the choice of a co-founder can determine the future of your company. Therefore, we recommend that you take the time necessary to choose the right person.
In today's article, we analyze the aspects that you must take into account to establish a fruitful relationship between co-founders and we tell you the main mistakes to avoid if you want the relationship built to be stable in the long term.
Reasons to have a co-founder
In the early stages of a company's development, having a co-founder will help you reduce the time needed to launch your product or service to the market and have the first market validations. Having a co-founder will allow you to divide tasks between both members of the team, making it easier for everyone to focus on those tasks for which they have the most appropriate skills and experiences, thus increasing your efficiency and problem solving capacity and reducing work overload and unilateral decision-making. Also, not being a Solo founder involves having the ability to generate a greater number of ideas, through brainstorming processes for which both of you will have different opinions and perspectives and, along the same lines, avoid mistakes at the beginning of your entrepreneurial adventure, thanks to processes of discussion and debate of these ideas. A co-founder can, therefore, improve both the quantity and quality of your work. Not only when it comes to technical issues can a co-founder be useful, it will also be beneficial to you in terms of the psychological aspect, offering you the moral support needed to push forward in the most difficult moments. Undertaking is a journey as beautiful as it is demanding, and there are numerous testimonies of how hard it can be to be a Traveller only and not being able to share this experience with anyone. Having a co-founder who understands what you're going through will help you stay motivated and not waver in difficult times and keep your feet on the ground when necessary. Although you may think that the rest of your team can also help you with all of this, it's difficult for them to get to feel what you're feeling as a founder and to have the same emotional (and most of the time economic) involvement as the founding team. Later on, having a good entrepreneurial team will increase the chances of your company getting funding more easily. Several studies show that startups created by several entrepreneurs tend to raise more money at their source than those driven by a single entrepreneur.
Mistakes you should avoid
1. Choose only your co-founder for their technical skills. There are many people who assume that the skills that a potential co-founder has at the time they start working together are the only ones they will have forever. The reality is that work is the greatest place of learning for a person, so from Intelectium we recommend that you also take into account the importance of being able work with someone you really feel comfortable with spending time together. Sometimes, choosing a co-founder with whom you already have a previous relationship*, have collaborated and, therefore, know how he will react to certain situations, can avoid unwanted conflicts that may end up involving the closure of the project or company. *The previous relationship can be both of friends themselves, as well as of co-workers, university classmates with whom you have worked on different projects, etc.
2. Don't leave anything in writing. In the beginning, when everything is going well, you don't know how you're going to deal with disagreements or situations of tension. On the other hand, it will be extremely difficult for you to deal with a problematic situation once it has already occurred if you don't have anything written about it. For this reason, and although it is uncomfortable to talk about certain things such as who gets what percentage of the company or if a “vesting period” is established, Intelectium recommends that before officially starting to work with your co-founder you write a small Initial partnership agreement that can prevent complications in the future. In this sense, being forced to draft a first agreement of partners, will encourage transparent conversations between co-founders regarding roles and responsibilities, performance, how to react to critical situations, etc. Acquiring a routine of holding this type of conversation periodically, with the objective of being able to share how you feel about the current situation of the project will help avoid misunderstandings and degradation of the relationship due to lack of communication.
3. Distribute equity in an unbalanced way. At Intelectium, we are clear that you should never spread your company's equity by 50-50, when the founding team is made up of two entrepreneurs. With this distribution, decision-making becomes very difficult in situations of disagreement between both members of the team, even killing many companies. However, a very unbalanced division of the company's capital favors the demotivation of those with fewer shares. Therefore, it is important to find a balance point where The division of actions maximizes motivation of each and every one of the members of the founding team, without neglecting the importance of having someone who can break the tie in the event of arguments between the founders. In relation to the above, another mistake that founders usually make when it comes to distributing capital is to do so depending on the time when each of them joined the team. It takes 7-10 years to build a high-value company, so small variations at the time of joining the project, do not justify massively different shareholder divisions of the founders at initial stages.
4. Look for your co-founder once you have the idea and the necessary funding. It is common to see many entrepreneurs start looking for their co-founder once they are very clear about all the details of the project they are going to carry out and even once they have obtained the first round of funding. In this sense, although looking for your co-founders after you have obtained funding doesn't mean that your project cannot be successful, it may be less favorable than looking for them in the initial stages. This is mainly because, once funding has been obtained, a direction and strategy have been established for the project, and it can be harder to find someone who fully shares that vision. It can also be difficult to find someone who is willing to join the project at a more advanced stage and with less chance of having a significant stake in the company. On the other hand, looking for your co-founder during the earliest stages will allow you to spend the time necessary to find the right person and establish a solid working relationship before financial pressure becomes a determining factor for the survival of the project.
5. Not clearly defining roles and responsibilities It's important to define the roles and responsibilities of each co-founder from the start to avoid confusion and conflict later on. Most importantly, you should be comfortable with that person having the last word in the areas that you have agreed are under their responsibility. Once everyone feels that they have an area they manage, they will feel more comfortable accepting comments and more careful when giving them. You'll also work hard to ensure that the parts of the company you're responsible for are successful, because it'll be clear who bears responsibility if they don't.
Other items: https://intelectium.com/que-es-un-foro-de-inversion-y-por-que-puede-ser-crucial-para-que-logres-financiacion/
