Finding a co-founder can be a daunting task. For some, it’s love at first sight. For others, the chemistry was just right and some partnerships were developed over a slow building friendship and trust. But let’s say for a moment that you haven’t yet found “The One” or perhaps you’re not convinced that you need anyone else at all.
I have worked on finance teams at Orbitz (formed by the 5 largest airlines in the US who don’t really like each other), Potbelly (solo entrepreneur) and KAYAK (co-founders) and all of these companies have been successful, so it’s not a foregone conclusion that you need a Co-Founder at all. But through my experience, I’ve picked up a few pros and cons of having a Co-Founder. Read on…
5 Pros to Having a Co-Founder
- Cash: do you need funds to start your business? A Co-Founder who contributes money to start the business can be very helpful.
- Talent – having someone who is willing to provide expensive talent in exchange for equity might make or break your business when cash is at a premium, especially when they have a critical skill or expertise that you lack.
- Energy –we all have times when we’re just in a funk and are not feeling like we’re going to conquer the world. The right Co-Founder can pick you up and bring you back into the light.
- Network – whether you’re sourcing product, hiring employees or looking for financing, your network is key. Often all you need to get to the next level is the right hook-up, and if one network is good, then two is better.
- Attractiveness to Investors – you know how sometimes you become more attractive to other people when you’re in a relationship? It’s the same with co-founders and investors. A lot of investors like the dynamics of the Co-Founder relationship for all of the above stated reasons. It hedges their bets a bit more.
Sounds great! Sign me up! Not so fast, because there are…
5 Cons to Having a Co-Founder
- Disagreements – Co-Founders don’t always agree and sometimes, those disagreements can get downright nasty. Sometimes, they result in divorce and if you’ve ever been divorced, you know it’s not pleasant even in the best of circumstances.
- Commitment Issues – your Co-Founder may not be as committed as you are. What if she gets another job offer or gets cold feet when the going gets tough (and it most likely will get tough)?
- Performance Issues – when it comes time to get busy, your co-founder may not perform as you expected. What will you do if the goods aren’t as billed?
- Hostile Takeover – sad but true. Sometimes your Co-Founder will think that her contributions are worth more than yours and will come back to the table for more of the company, or will work with the board to push you out.
- Personal Problems – what if your Co-Founder is your best friend and it just doesn’t work out? Is the friendship over too?
The good news is that the cons can all be mitigated, but they are all important considerations. Assuming you’ve decided that the risks are worth it, what should you look for in a Co-Founder and how do you find her?
The first answer is simple. You want a person who checks more of the boxes in the “Pros” column than in the “Cons” column. What issues are most important to you? Once you know why you want or need a Co-Founder, it will be easier to know what skills, traits and characteristics are most important to find.
Some questions to ask a potential Co-Founder:
- What do you need a co-founder to bring to the company?
- What critical resource are you lacking to succeed?
- What will make the biggest difference in your ability to succeed?
- How will you resolve differences?
- What is she looking for in the relationship?
- What outcome would be a success to her?
- What are her expectations on earnings and how long can she go without any?
- How well do you know her? Note: this is neither a good thing nor bad thing – it will just determine how much due diligence you need to do before you bring her into the mix.
- Does she share your vision? What other ideas does she have?
But it’s not just your choice. Your Co-Founder has to decide whether to get in bed with you as well. I asked my Co-Founder, Stephanie, why she decided to take a risk and join me at Mia Tango. Here’s what she had to say:
“As a start, it was really about core values. I knew that we were both committed to being challenged, to working and to building something, all while also trying to prioritize family and what I’ll call an integrated life (I don’t really find that I separate work and personal life, nor do I think you do. We’re both integrators.). It’s funny because – if asked – I may have answered first with the passion of solving a problem that I felt needed to be solved (and the fact that it’s related to women and empowerment), but I actually think the values came first – and I think they really should come first in making this kind of decision.”
Complementary Skill Sets
“I think it matters that your background is Finance and mine is Marketing. If we both came from a Finance background, or a product background, or a Marketing background, I don’t think we’d be able to cover as much ground, or perhaps even challenge each other’s thinking enough.”
Ego, or Lack Thereof
“I’d say the ability to check ego at the door was also a driver – both mine and yours. You said very early on to me that at some point you weren’t precious about what role you played in the company. I feel the same way. I am willing to work on whatever is needed to get things done.”
A Winning Idea
“This may come out the wrong way, but I can’t honestly predict whether the company will be successful. BUT, I can say wholeheartedly that I think it’s a problem that needs to be solved and that I think we have great ideas and a great approach for solving it. That also factored into it.”
You can see why I love her, can’t you? Perhaps you’ve now decided that you need a Co-Founder and that you know what you want in one, but how do you find your Stephanie? We found each other because we both worked at KAYAK, and former co-workers are certainly a good place to start because you already know one another’s strengths, weaknesses and work styles, along with your compatibility. A few other suggestions of where to meet your girl:
- Investors. Top VC firms have a vast network and will have a good idea of the type of person that would complement your skills and style. This is how the KAYAK co-founders found one another.
- Your Network. Get the word out to people in your network that you’re looking for a co-founder and ask if they might either know of someone or be willing to make introductions to other entrepreneurs. Have as many conversations as possible – you never know when you’ll meet a gal who knows a gal who’s just the gal you’re looking for.
- Networking Events. Go to events and make it your mission to chat up at least five different people. I’ve been amazed at the coincidental meetings I’ve had at events. Just today I went to a luncheon in Manhattan on getting financing and I sat right next to another founder who happened to be located in the same town in Connecticut as I am.
One last piece of advice: once you’ve found her, it is critical that you put together an employment agreement/founders agreement with your attorney. CRITICAL. This is not the place to skimp. With that said, may your union be fruitful and may the wind be always at your back.
Melissa R. Birge is the Co-Founder and CEO of Mia Tango, an online maternity boutique that features a curated set of maternity clothing that customers can buy new or used, and then trade back in for credits to buy new styles. She also serves as the audit committee chair on the board of directors of Paris-based SRP Group, which operates the fashion website showroomprive.com. For more from Melissa, click here.