I am at the stage, where things are slipping out of hand. There is too much to do. I wanted to ask community, if it`s okay to have three co-founders - expert in three major areas, or suggest an alternative?
We are launching our beta version end of August,2018, and I personally believe, we need to start thinking and exploring avenues to raise capital to fuel our startup. We are working on a very ambitious Artificial Intelligence product concept.
Saquib what are your concerns exactly about why you might not want 3 founders?
There is no inherent reason why you can't have 3, 4, 5 or more founders. But there must be some nagging concern that you are not expressing.
It is good to evaluate equity with regard to founders. If you need the workers, unfortunately you need to pay with upfront compensation, or equity. You can always compensate with a percentage of sales also if you do not want to grant equity. I can tell you though, personally, I do sales and equity. But I bring strategy that leads to make or break deals...So for example, the potential partnership with a Fortune 400 CEO or a company that is doing billions in yearly revenue. Certainly if your co-founder is doing less vital or impacting work for your company, I would be hesitant to do both and the equity decreases the less the contribution. The reality though is right now the ethics of entrepreneurship gains less attention than it should. There is nothing ethical about expecting work from someone and not compensating them for their time and work, and I see a lot of entrepreneurs that want to keep going back to their well for free advice, free coaching, free strategy formation, free connections. You very likely wont gain anyone of value or worth to your company who is willing to work for free.
I would encourage you to certainly think through the situation, but don't fall into the trap of wanting to hold on too tightly to equity. Its the whole 100% of little to nothing is little to nothing.
With regard to cofounders, you can structure the equity deal in any number of ways. For example, the co-founder can gain equity but be limited in his/her voting or decision making rights if you are concerned about control.
Generally, assuming you are the CEO, find a top notch CFO, although it is very possibly you may only get him as an advisor at this stage but that is ok. Find a good COO who can help with your operational elements and strategy. And possibly a Marketing Co-Founder (when you need it).
The COO and the CFO will have the competence to work with you and together to put together a top notch business plan and financials. Personally that is where I would start. And I can tell you as the COO of several startups, I always looked to evaluate bringing in a top tier CFO as the next step, so your thinking is on track in my opinion!
Cocur. Their must not be greed from either of parties. I'm not asking free help, but rather right help with fair equity. I strongly believe, CEO and other C-suite value system should match and work for the common objective. Honesty is the best policy!
Hi Khan, Start Planning your work, but before that just take a break. Get more peer support, get expert advice, plan, plan and plan - the golden words will remain true forever, "failing to plan is a plan to fail".
Startups sound easy and good only in books and movies. In reality, its a little tough as it needs a little extra self awareness, dedication, discipline, patience and passion.
Never going to be easy, but anything's possible ONLY If the 3 co-founders share the same goal and vision, conflict arises when the goal/vision differs or when there is a conflict of interest. Approaches, perspectives, may differ but it all should be well planned against a common goal. -
When looking for a collaboration, I would recommend you to evaluate the levels of these elements; understanding, empathy, mutual respect, willingness, collective decision making skills, passion, dedication, knowledge.
Every one of us have personal preferences/approaches when it comes to doing things. To make a small team work towards a common goal, firstly identify the motivation of every individual (the basic reason to why someone gets out of bed every morning, for some it may be money, for another it could be something else) use it to drive the individual towards the vision of the company.
Here in this case, 3 domain experts collaborating to create a perfect team. May be, It could be a high performance team only for a short period, but in the long run it may wear out as it would lack dynamism, and ego clashes are another fear factor. .
Ultimately, every member you get onboard should only reflect actions that will strengthen relationships, uplift each other, willing to put in that extra effort to make things happen!
Hope this was helpful. Good Luck!
Sure you can have 3 experts as Co-Founders if the start up can afford it or if they are willing to wait for basic compensation after raising funds with the approval of the investor but instead take equity for now
Curt, I am hesitating to share slice of the pie a.k.a Equity. I dont have enough funds to hire "top" level experts in any capacity ( Full-Time / Consultancy). My focus is to roll-out MVP as soon as possible, and test the waters, but many times I feel urge & need to have these experts.
" There is more than one way to skin a cat :-)"
Anas, love the brutal energy and honesty of what you said! "investment" well stated!
It's amazing you have 3. 3 is the perfect number.... best thing is all 3 have expertise in different fields, which means all of you complement each other, that's a great advantage
Well it's quite noble to have the 3 as long as they share the same vision with you and are willing to take equity. They must be flexible and willing to share the losses without having any form of blame game. No one should put a claim on you if the it fails.