We have a live product with over a thousand users and revenue. But as a solo non-tech founder, I am viewed negatively by some investors.
I tried to find a cofounder on CFL a year back but mostly got people who tried to sell me overseas outsourcing. A few others asked if was funded and never heard from them when I said ‘no’. So I went it alone.
Of course significant revenue would solve their objection but isn’t that what the investment is for, to build out the product and some marketing/sales?
I am very open to adding a tech co-founder but as others here have noted, it is extremely hard to find a good one who is willing to work on someone else’s project.
As far as being “non technical”, I have a few years of programming experiences, came from the science side, and was involved in all aspect of development current product. But since I didn’t write the python scripts myself, I get dinged.
How do I get beyond the “solo, non-tech founder” objections with investors?
***Update from responses below***
First of all, thank you to everyone who has responded. Some great advice.
A few things to clarify: I did not hire a firm/outsource the product. While the current team is in Eastern Europe, I consider them coworkers and have met them/drink with them etc. Also I had tech friends and advisers pitching in on high level stuff. And I do a pretty deep dive (ex. attended 2 neo4j training workshops before we adopted neo4j).
The reason you get rejected is not because your product is not good enough but because not having technical co-founder significantly increases technological risks. Let me elaborate.
You need to develop your product, so you hire someone to do it for you. Given that you do not very technical yourself you can be easily manipulated by companies you hire. You see, they are third parties - they work to benefit their business not yours. They will not necessarily (and in practice almost never) will give you advice that benefits you but them. When it comes to choice of technology they will likely to sell you what skills they have not necessarily what you need. They will also try to take control of substantial portion of your business as insurance that you cannot fire them and hire someone else if they don't perform. Having a technical person on your team will put control back in your hands.
On my most recent engagement I was helping a client to do exactly that to get out of this pit and regain control of their environments and their IP. It costed them time and money but if they would have someone technical on their team from the very beginning that could be easily avoided.
This is just one example, but you will need to make lots of technical decisions while developing your product and you will need a trusted advice. That advice can only come from a person on your team and if this person has vested interest in your business it is even better.
I don't think you need a co-founder though. As long as you can demonstrate to investors that you understand you limitations and taking measures to mitigate your technology risks this should satisfy them (especially considering that you already have clients). You could for instance hire a part time consultant to help you with technology related decisions. You can also have board of advisers who is on your team. Or better yet have both ;-)
If you however decide to take a technical co founder this also comes with the risk. First of all make sure you have vesting schedule ideally with a clif when giving away your shares. Also, keep in mind that your new co-founder may satisfy your immediate needs but he or she might be not the best fit in the long run, so keep your options open.
I personally was involved in all of these capacities at different times - co-founder, consultant, advisor and it benefited the companies I worked with every time. I'm not into this right now but feel free to reach out, I can always find time for a chat.
I hope this helps.
*** Update ***
I saw some comments that one does need investors if company has customers and revenues. Here are few reasons why you may still want to have investors:
- Introductions would be the first one. When you bring investors on board they bring not only monetary value but also their expertise and connections and this may be better than money under right circumstances. If your business already has revenues and customers then you will be in much better position to bring investors that are right fit for you and get maximum value from the investment.
- Valuations. You will have much better idea of value of your company and what outcome you can expect in the future. More rounds you do, the more realistic your valuations get.
- Growth. Once you reach the stage when your business is being noticed you will get fierce competition. And if your idea is especially novel, other companies will try to replicate your product and some of them will have deep pockets. So, in order to maintain your advantage you will need to scale fast. This is when investors cash comes handy.
- Building trust. It is like building credit history - in order to have ability to raise substantial investment you need to prove your ability to convert money into value from previous rounds. Having previous history makes it much easier to raise money when you actually need them.
But again, it all depends on your ultimate goals, size of the opportunity, type of the product, etc. So, these are not rules, just suggestions.
Just my 2 cents ;-)
If you already have a product, customers and revenue, screw investors.
Why would you need them and all the strings that come with other people's money, when you can grow organically and keep full ownership of your company?
I wrote an article about this a while back:
What your investors are most likely after here is a demonstration of your ability to attract a minimal core team. In your case, this seems to be having someone who really owns the responsibility for day-to-day technical operations which is not something for the faint of heart or the untrained.
One of the most critical personal traits of successful entrepreneurs is their ability to recognize talent that is distant from their own background and expertise, to respect that talent and to join in a mutual trust of partnership and shared ownership.
Attracting someone different, sharing responsibility and taking part in negotiating, maintaining and furthering partnership is possibly the most critical quality in successful entrepreneurs because without this capacity? You will not be successful in your negotiations with venture partners or business partners, customer partners and so on.
This question is really a challenge that you must rise up and do, in order to answer it.
Get used to being rejected for arbitrary reasons. Some investors are afraid to put money into solo founders. Don't let that discourage you -- the right investor will see the value in what you're building and the success you've already wrought.
Hi Don, you should continue trying to find a technical cofounder. Just for example, I am CTO of currently 2 startups and I am always interested in finding a good team with a good idea where I can bring in my specific technical expertise.
The main word here is "specific". You have to advertise very precisely what expertise you are looking for. In case you have a problem in defining this precisely, describe your idea in detail. And please, don't be afraid someone steals your idea - no one will.
Continue searching, a good CTO is as hard to find as a good wife, just much less sexy.
I am a Software Engineer willing to help you in my spare time. Just let me know a little bit about the project needs and I can see if I can help out. Just email me at firstname.lastname@example.org
Don, happy to share experiences on this front and talk about scaling/accelerating your business. I'm at email@example.com.
Anyone who wants to know more about the company, please contact me at firstname.lastname@example.org
Revenue would trump all objections but as you stated, that is the point of fundraising. Have you tried accelerators?