How To Find a Co-Founder for a Startup (Your Complete Guide)
Being an entrepreneur is hectic. We can all agree. So what's better than having two (or more!) co-founders who can stick with you on the rollercoaster journey of building your startup?
But how will you find other women (or men!) who are as determined about making the company work as you are? Do you even need a co-founder? What are the pros and cons?
Read on to find all the answers you're looking for...
The easiest way to find the perfect co-founder is to ask someone you're close with to join you in building your company, someone that you trust completely and you've known for a long time. Like a work colleague or a close friend. But if you can't find someone from your circle - or you don't want to keep it that close - you can also look to find a compatible co-founder online on websites like StartupSchool and CoFounders Lab.
Business owners face challenges daily; that's one thing we know for sure after interviewing 500+ women on Female Startup Club; having a co-founder to see them through the good times and bad could be a saving grace. Keep reading this article to get answers to all your questions about looking for a co-founder.
Ok... So Do You Need a Co-Founder?
Yes and no. It's not a black-and-white answer. Co-founders bring a lot to the table and are helpful while running a business. That said, many companies have thrived while run by a single founder slash solopreneur (myself included!).
There are many advantages to looking for a co-founder. You can look for someone who has skills that complement yours. For example, if you do all the technical stuff, you can look for someone with good management, marketing, and public dealing skills. Or maybe you're a pro at the creative side of the business and want to find someone who can handle the finances. The key here is not to have the same skillset.
Additionally, the right business partner will help you stay motivated through the lows (because there are so many, every single day) and keep you grounded through the highs, hence providing stability to the business.
Another reason we've heard a lot on Female Startup Club as to why two founders are better than one is increased productivity. Having multiple founders working on startups reduces the time taken to complete tasks. It also helps you make improvements within the company if you both put your mind to it.
That being said, having a co-founder isn't a must-do. Many people are more productive on their own and may be better suited to run a company alone. One thing to remember is that many investors don't invest in a single-founder business. So this fact alone may force you to look for a co-founder even when you don't necessarily need one.
How Do You Determine the Equity Split Between Co-Founders?
Now that you have determined whether you need a co-founder, how do you split the equity? Split this imaginary piece of the pie that's crucial to get right in the beginning. That is the question.....
Typically, a 50/50 equity split between co-founders at the start of the journey - and both working full-time - is the best option for most businesses. This ensures that both parties are equally invested in making the venture successful and that there are no disparities in decision-making.
But this doesn't mean that a 50/50 split is always ideal. If you have been working on the venture for a long time and intend to partner up with someone later on, you having a greater share in the equity makes sense.
However, something to keep in mind while splitting equity is your long-term goals.
Your final goal is the company's success, and being selfish with an equity split is a recipe for the opposite. If your previous contributions haven't granted you any success, and you still choose to deviate from a 50/50 split, you might be making the wrong decision.
You want to ensure that your partner is equally motivated and determined as you to make the company successful in the long run. If this means that you will have to overlook the eight months of work you did beforehand and will have to give them a 50% share, then so be it. For entrepreneurs, eventual success is what matters most. This is something to spend some time pondering or seeking out advice from other founders in your network who might be able to help.
What Can Go Wrong?
While having a co-founder has many upsides, it's not always all sunshine and rainbows. If you're an avid listener of Female Startup Club, you'll know there have been a few episodes where the founder relationship hasn't worked out, and they've had to go a separate way.
When I spoke to Erin Deering - Co-Founder of Triangl recently, she shared that her partnership with her business partner, fiance, and father of her kids suffered in the years of building their mega-successful swimwear empire. Eventually, she had to exit the business and her relationship. A co-founder relationship turned sour can profoundly affect your physical and mental health, and it's something to be mindful of.
Many things can go wrong with co-founders, like poor compatibility and misalignment of long-term goals and methods. Arguments with your co-founders can affect your personal life if they are from your circle.
You may choose someone based only on their skill and not your compatibility. And if you've signed an agreement, you could be stuck with someone who doesn't care about the business for a long (longgg!) time.
Also, if your long-term goals do not align with your partner's, you may have a problem. You may want to start big, launch the business with a bang, etc., while your co-founder may want to go slow and build up at a steady pace. You might have different thoughts about raising capital or how to grow your team. While both approaches are fine, they will end up clashing. The way to problem-solve these things ahead of time is to have these conversations with your potential co-founder/s upfront! Get it out of the way early to know where everyone stands.
What Skills Should I Look for in a Co-Founder?
Now that you know everything about having a co-founder, you can start looking through your circle of colleagues, friends, or family or log into websites like Startup School, CoFoundersLab, and Start Hawk to find one. If it were me, I'd also start going to different networking events to try and meet new people and have dots connected.
Now let's talk more about what you should be looking for.
The skills you need to look for in a co-founder include complementary skills and interpersonal compatibility. Your approaches and working styles should add to each other - not be a source of tension.
The first thing to look out for is skills that complement yours so your co-founder can pick up the slack in areas where your skills are limited. As we mentioned, if you're the creative brain, find the analytical brain. Or vice versa.
Compatibility is also crucial. Even if your co-founder doesn't have all the required skills, they should be compatible with you. As long as you both enjoy working with each other every day and you're both willing to learn new skills for the sake of the business, you shouldn't rule them out.
As a precautionary measure, before you jump into signing any paperwork, you should try working together on a similar project on a smaller scale. Test the waters, friend! This will tell you a lot about the person and how they act in different situations, especially stressful ones, which will help you make a decision.
In Conclusion...
Finding a co-founder for your business can be confusing. The best way to look for one is to go on a few websites online or look through your inner network and circle of friends, match your skill sets, and work on a small project together before making the decision.
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