Do I Need a Co-Founder to Start a Business?
When I started my tech business in 2014, it was at the height of the start-up craze. Everybody told me how easy it was to raise money and that it was “the” time for a female entrepreneur. However, during every application for incubators or funding, I heard this one question: “So, you are a one-woman-show?”, one eyebrow raised and my counterpart lost interest.
I was really bothered by this – I could write a separate article that a man would probably get a very different reaction. However, this is not the focus of my article today. I did understand the main concern, especially of investors: If they invested in my business and I walked over the street and got hit by a car, their whole investment would be lost. However, I never thought that starting out on your own would equal failure.
In the beginning, I took it personally. I even started questioning my business and myself. Was I really on the right track with my business? Very often, the comment after the “one-woman-show” was: “If you do not have a co-founder, nobody obviously believes in your idea.” or “You have not managed to convince another person to join you?!”. That was harsh.
In the first months, I got more and more nervous. Not because there was something wrong with the business. I started to doubt everything – just because so-called “start-up experts” (a lot of whom had never actually founded their own business) told me I will fail just because I started out on my own. Unfortunately, this whole start-up game pushed me into decisions I started to regret very soon. Just for the sake of making my “team” more appealing to others. The absurd thing was, I did have a team. I just paid them. But what was so bad about that? I had programmers, a creative director and a whole team to shoot our videos. I myself had the money to pay for getting the product off the ground. Why would I just give away a stake in business if I did not need to?
Fast forward 1.5 years into the project, we finally went live with the app. And you know what? Gone were the questions about the “one-woman-show”. I succeeded in producing the product and marketing it. And I realized that the start-up game is played until a certain point. If you succeed, all these questions become more and more irrelevant.
I started listening to podcasts and read biographies of other entrepreneurs and there are plenty of founders out there who never had an equity partner. But they knew when it was time to bring on the right people. And I think this was exactly my approach as well.
If you are currently thinking about taking a co-founder onboard, I would recommend considering you the following:
Why Do You Need a Partner?
Never ever give away equity in your business just for the sake of having a co-founder. Always be very critical and analyse why you need a certain partner. Is it for investment? Does this potential partner have complementary skills? Or do they have market access/knowledge? It might sound unnecessary but I have seen it in so many start-ups that founders took on co-founders just because this is expected in the community. A valuable partner needs to bring something to the table.
How Do I Know if It Is the Right Partner?
Well, similar to our personal life, we actually never know for sure if it is the right partner. We can only spend time together and see if it really works out. There is no recipe where you can find a co-founder – it might be former colleagues or friends. I even saw advertisement for start-up events where you can be matched with a co-founder. I personally never liked the idea of being matched with strangers – neither for sharing my bed nor my business. Having a co-founder is like being married (or even worse). You see each other all the time, in very stressful situations and I think you should know you partner very well before marrying them or founding a business. I suggest to start working together with potential co-founders on a contract basis. If you see that you enjoy working together and that it is a good match, you may discuss a milestone system for them to become a co-founder with an equity stake.
Ask for the Same Commitment
In the end, you as the founder have the most risk and responsibility. If you decide to take on a partner and give away shares, make sure that this partner is as committed as you are. If you are willing to give away a big stake of your company, make sure that this partner is willing to take over the same risk and responsibility. Have you quit your job for this venture? Would this partner risk their career, savings and reputation? Are they all-in?
In Good Times and in Bad
I often hear from peers that they are looking for co-founders because they think founding a business is a lonely task. And it really is. But unless you have a 50-50 partnership, you will ALWAYS be lonely. A co-founder who joins you at a later stage may be committed. But if shi** hits the fan, it is you as the founder and majority owner who has to deal with it and make the decisions. Hence, loneliness should never be the determining factor.
You cannot imagine how much interest you get from people to join your venture when things are going well. But believe me, when it does not go well, most of the people just magically disappear. Therefore, make sure to have the right people on board. Those who have your back even in the darkest days. It will be tough enough, you do not need anyone who just wants to benefit from the success but does not want to work hard for it. I am still really grateful for the reaction of my business partner Nassi on one of the worst days: “Do not worry.”, he tried to calm me down. “Whatever happens, I know you and your values. I have your back.” And he did.
To sum up, the question about taking on co-founders needs to be assessed case by case. There is no one size fits all. From my own experience, I have developed a set of criteria which I apply to business partners. But I also learned that one woman can produce a great show.
What are your thoughts on co-founders? Have you founded a business solo or with a partner? Let me know, I am curious about your experience!