Building a team · Finding cofounders

I have found a potential co-founder. Now what?

Andrea H Special Projects Director

February 26th, 2016

After quite some time searching, I have found a potential co-founder with a marketing background (I am still looking for a technical co-founder for app development/expansion of website.)

But I am not sure what the best process is to see if he would be a good fit. I definitely plan on meeting with him several times and discussing his experience, talking to references, discussing the equity breakdown and communicating the direction of This Dog's Life but then what?

Do I sign a co-founder agreement? Do we work on a project for two months to see if we are a good fit? Do we do weekly checkins?

What steps should you take before you decide if this would be a great fit and commit to a co-founder relationship? Also, how do you ensure the person is doing the same amount of work you are doing and is as committed. What sort of precautions should you take to protect your company (and yourself) if it doesn't work out? 

Thanks,

Andrea


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Logan Kleier

February 26th, 2016

I used this Founders Expectations Alignment document to talk through all the issues.

I learned all kinds of things about my co-founder that were useful to know. It also helped clarify various decisionmaking issues, workload expectations. 

Here's the link: 

https://docs.google.com/document/d/1425RfK7JGISuFQXzJiCC_1UyXdrH9pU2Y7AjH51Zkkw/edit?hl=en_US


Sriraman Chakravarthy Founder & Director at Metamorphic Networks P Ltd

February 26th, 2016

My suggestion will be 
a. first sign an NDA with him / her to ensure that product idea does not get copied.
B. define the roles and responsibilities of the co founder and explain clearly the expectations
C. work for some months may not be the right one as he is from Marketing - Means he can sell only when you make the product. so difficult. Get him involved in the customer requirement etc. and make the two months tied to clear deliverable which you can measure.

Finding a Co Founder is not that simple. You can hire an employee but founder needs the same passion as you on the solution you offer and he need to bring in the value  

Richard Janezic Growth and Digital Strategy, Sales, and Services; Transformations in Tech, Healthcare, Life Sciences

February 26th, 2016

Agree with much of the prior responses.

Most important matter is clarity of YOUR REQUIREMENTS.

Many people are good at many things; whether they match up with your thinking, style, requirements, conflict management, aspirations, dedication etc is far more important. Until you've achieved clarity on those elements, the rest matters little. Culture and relationships will be built on trust in style, capabilities and in quality and quantity of purposeful execution.  

If you've not yet done so, take an evening, and following 15 minutes of meditation (not medication) to clear your mind, get a pen and a few pads of post-it notes.

Start by listing 1 key element of fitness or requirement per note.

After you've identified your key elements, separate into your top 20, in descending order. Then, on each note, identify why it's important to a) you, b) the effort/product, c) the team you intend to build, d) your current or expected investors. Then clearly identify and articulate what exceptional performance looks like to you for each element, and to your other 3 audiences. Then determine a scoring system (1-5 or whatever your yardstick) of exceptional, overperforming, par, needs help, needs to leave).

After you feel like you've dimensioned and prioritized that well, then develop questions and tools you'll use to evaluate candidates (lots of good ones exist). Until you do that, you run the risks of guessing, relying on feelings and hope, and hearing what you want to hear rather than the true facts and insights you need for your endeavor to succeed.

Your list will help you identifywhat the candidate needs to be great at to fill in where you're not strong. Doing this process will help you then collectively understand what you can and should outsource. It will give you, your product, your team (either now or as you hire them), and your investors the quality, clarity and confidence required to give you the best chance for success.

Brief, buthope that helps. It may sound tedious, but the quality of thinking through those elements will deliver great dividends in helping you avoid mismatches, and in scoring and selecting the right person with the right skills and style for your endeavor and organization. It will also help for followon hires, and in explaining your rationale to your team, your investors/advisors, and potential high profile clients.

Good luck

Kawika Maszak Chief Wordologist

February 27th, 2016

Aloha Andrea,



I'll add to the growing number of people who already have mentioned this. Approach a potential co-founder from the standpoint of a personal relationship.


Study the history of successful startups. You'll see that the co-founders started as friends. Some are even romantic partners in life. What they share is a history that began before the startup.


There's a huge benefit to this.


Your professional and personal lives will intertwine. So, it's not just about the synergy of how you can work together. You must be confident that you can live together.


We know that Mark Zuckerberg co-founded Facebook with his college roommates. Nathan Blecharczyk co-founded Airbnb with Joe Gebbia after they became roommates. Mutual friends introduced Dennis Crowley to Naveen Selvadurai. Two years later, they co-founded Foursquare.


Startups tend to be all about "right now." But they must begin with a solid foundation. That foundation is a history between co-founders.


You need this. Investors look for it, too.


Consider these two bits of advice from Peter Thiel's book, "Zero to One."


  • "'Thiel's law': a startup messed up at its foundation cannot be fixed."
  • "Now when I consider investing in a startup, I study the founding teams. Technical abilities and complementary skill sets matter, but how well the founders know each other and how well they work together matter just as much. Founders should share a prehistory before they start a company together-- otherwise they're just rolling dice."


Peter Thiel and other successful VCs want to see a considerable history between co-founders. They want to see it for the same reason you need to have it. The relationship between co-founders is predictive of a startup's viability.


Does this mean you're out of luck if you don't have a longstanding relationship with a co-founder? Far from it. That's what startups are all about. Defying convention. The co-founding team is only a part of what will determine your success.


Just know that it's one of the things you have to get right. It's more than a test project of a couple months. It's more than weekly check-ins. It's more than establishing precautions to protect yourself and your company.


All these things are for employees. Not co-founders.


Meet up with this potential founding team member, Andrea. Spend as much time as you can with them. If you don't have history, create it.

Lorenzo Polacco Snr Director, Sales & Advertising Operations at Yahoo!

February 26th, 2016

agree to a vesting schedule for equity, so that the co-founder only gets equity after a certain amount of time. Also include a clause that the company has a right to repurchase all shares in case the co-founder leaves.
A good startup legal office will be able to help with this. Mine helped a lot. 

Mitchell Bolnick Business Mentor, Adviser, Consultant for Start-ups, Small Businesses, Growing Businesses

February 26th, 2016

Andrea, I support start-ups as my business. One thing I highly recommend to them all is the utilization of personality testing to find out where there are synergies and where there are potential conflicts. Understanding how best to work with each other is very key to early and long term success, especially with early hires and/or partnerships. I have copied a colleague of mine, Dr. Bob Ruotolo. I suggest you reach out to him and discuss his program. It is not expensive and can be the difference between survival and not surviving in business.

Adam Arthur Atom Creative Corp, DevShare and infoATM

February 26th, 2016

Hi Andrea, How is it going? I think I responded to a question of yours previously. I'm glad that you're making progress on your startup. Are you married? If yes, ask yourself how you evaluated your decision to get married. If not, ask yourself how you would judge a potential husband or wife. When you're getting into business with someone, you're getting married to them. My suggestion is that you give yourself concrete and comparatively painless 'exit' strategies. So, as a part of your discussion with this person, have a concrete and honest discussion about the process by which you will separate, if things aren't working out. If the expectation is that this person contributes 40 hours per week to the project, get it in writing. In other words, this is business and nothing should be left to "trust." Discuss every possibility and eventuality and document it in writing, preferably through a contract of some kind. I went through a horrible, just absolutely horrible experience where I didn't follow this advice and it turned out just awful for me. As a part of your discussion, include something about concrete deliverables that can be measured. You need a way of determining whether this partner is actually bringing the value you expect him to. And, if your potential partner balks

Joe Albano, PhD Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.

February 26th, 2016

Want a cofounder? Build a relationship. 

Decide how things are going to work. What are your expectations of each other? Of the company? Of how things like equity and compensation are going to be divided? What are your needs? How much money do each of you need to live and where will that money be coming from? What will you do when you disagree? When things go wrong? 

If things get serious it might be worth bringing in a professional skilled in these kinds of conversations. 

I'm not saying that NDAs and other protections are irrelevant ... but they just cover the basic mechanics (and in many cases are unnecessary - the value is not in the idea, it's in the execution). 

The bigger point is that legal documents are the tools of transactions. Great partnerships are built on relationships ... and great transactions start with great partnerships. 

Roger Royse Royse Law Firm

February 27th, 2016

all good comments but keep in mind that once he is a shareholder, it is like being married to him so I like the idea of working together first. As a legal matter, an NDA (with non intervention and non solicit language) is a good idea and you absolutely want to have cliff vesting just in case. There are some systems for determining equity percentage splits, but as a practical matter they tend to be negotiated. When you do decide that you want this person, I suggest milestones and deliverables, at least for the short term. It's a scary thing, but startups have to take some risks. Good luck.

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

February 26th, 2016

You want skills and commitment from any partner. You need to be able to trust that your partners will step if you make a mistake . Good partners work to a common end, have each others' backs and make each other better.  I have been very fortunate to have had good partners for the last 20 years. Before that, it was hit or miss. To protect yourself and your company, you need a good lawyer. Definitely get a written agreement and include a method to divorce each other if it does not work out.