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.

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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.

 This article was originally published on the Sheroes platform on the 9th of April 2014. 

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

2 thoughts on “Find a Co-traveller – Find a Co-founder”

  1. Very true about most points although I would like to disagree on the socio-economic front being equal between Co-founders…..sometimes you might find a huge chance and opportunity in “that” someone who probably is not of the same social and / or economic platform and which in itself might turn out to be advantageous to each in their own way. Also people across the globe is sometimes considered a good mix to have a distributed environment of viewpoints rather than all co-founders belonging to the same ethnic / racial background. (of course this might not be always practical when starting a small / mid-sized venture localized to one country…..)
    Would like to know your thoughts on this

    1. The observations made in my posts are not ‘rules’. They are merely indicative of what could generally work, and in some cases different circumstances could mean that the generalizations will not work. 🙂

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