Starting a startup business is no small feat, but you’re taking the right step by educating yourself on where to find and meet co-founders for your startup. With or without significant starting capital, having a trusted co-founder by your side will make the journey so much better. And we’re here to educate you on not just how to find co-founders, but where, what to look for, what to avoid (red flags), green flags, equity arrangements, and more.
By having the right co-founder by your side, you will raise your chances of success significantly. But did you know that 23% of startup failures are attributed in part to having the wrong team? Co-founder clashes can kill a startup and we know you don’t want that to happen. So remember, a solid team is just as important as the product/service you’re creating.
You’ll learn about the following topics:
- Important points to understand before starting your search to find co-founders
- How to find co-founders in real life and online
- What to message your co-founder prospects
- Not bringing co-founders on board too early
- The cost of picking the wrong co-founder
- What to look for in a co-founder
- Working together on a trial basis
- Red flags to watch out for
- What to do if you’ve already started working on an idea with friends
- How to minimize the risk of choosing the wrong person even more
- Tips on reaching an agreement
Important Points to Understand Before Starting Your Search to Find Co-Founders
There are a few important points to understand before starting your search to find a co-founder.
- Your co-founder candidates are interviewing you just as much as you’re interviewing them (if they’re serious).
- The more successful your co-founder prospect is, the more selective they’re going to be when choosing which startup to join.
- Your pitch needs to be strong and your story about why you’re doing your startup needs to be compelling.
- We recommend that you search for co-founders after validating your startup idea. However, you can still find co-founders while validating, which we’ll discuss later.
- A startup involves juggling tons of different tasks and responsibilities. But you don’t want much overlap in skills. This reality makes it even more important that you find capable co-founders who can do what you can’t.
Before someone joins you on your mission, most people will want to see some evidence of traction with your startup idea or accomplishments within your work history. The exceptions to this are if they’re a college student, they’re less qualified, less experienced.
If they’re interested, don’t assume that they have already chosen to work with you. You need to make a good impression and show confidence in yourself, in what you’re doing, and why you’re doing it. That confidence will translate over to them so they don’t feel uneasy about joining you.
How to Find Co-Founders in Real Life and Online
Most tech startups will have two to three co-founders. The co-founding roles that are most prominent are CEO, CTO, and CMO. Sometimes the fourth role will be either CFO or COO.
Let’s go over where you can find a co-founder for your startup and start building your rock-star team! We’ve saved (arguably) the best for last! So make sure you go through all ten ways to find and meet potential co-founders.
1) Using LinkedIn
LinkedIn is one of the best places to find a co-founder because it’s the #1 social media site for professionals.
But, how can I find co-founders on there? You may ask…
There are a few ways you can find them.
⭐ 1) Reach Out to Your Connections and Ask for Referrals
Referrals are an amazing way to meet new people who are revered by your friends and colleagues.
Reach out to your connections and ask if they can refer anyone that might be interested in your open co-founder roles. Tell them about what your startup does or will do. You miss 100% of the shots you don’t take. It’s a slow process but you’ll never know if you don’t reach out and try.
⭐ 2) Use the Search Bar
You can also search for a co-founder on LinkedIn by typing in the role you’re looking to fill within the search bar.
Here’s the process:
- Find the dropdown button on the left criteria pane labeled “People.” “All” may be selected by default.
- Then sort by location on the next dropdown menu. You can change it by clicking on the area that you most closely identify with or by typing in another location that wasn’t pre-filled.
- Click on “All Filters” and select the additional options you’d like to filter by and click “Apply”
- Now start checking out their profiles. The easiest way you can do this is by opening their profiles into new browser tabs to keep your search results intact.
In addition, you can save a user’s profile to PDF for free. Just click the drop-down arrow next to the connect button to find it.
⭐ 3) Post a Status Update
You can post a status update and mention that you’re looking for co-founders and ask for referrals.
Describe your startup and what you’re looking for in that co-founder.
In addition, you can link your company profile to the job description.
If you have a job description on your website or on Wellfound Talent (formerly AngelList), you can share a link of it in the status update. Alternatively, you can share it in the first comment of your post.
You’ll want to set the visibility of that post to public, as well.
⭐ 4) Joining LinkedIn Groups
Join groups on LinkedIn that will have the type of co-founders you’re looking for.
For example, if you’re looking for a marketing co-founder then look for and join groups on marketing. If looking for a full stack developer, join groups for that, etc.
Once you’re approved to join the group, there are two ways you can look for people.
1) The first way you could look for co-founders is to create conversations on the discussion board.
2) The second way to find a co-founder in a group is to message people within the group. You can access the members section by clicking below the group name where it shows the member count to the left.
When it comes to discovering people in groups, they are a different kind of animal. That’s because they don’t have the search capabilities within them like the rest of LinkedIn allows.
When looking for people to message, you can search by the term you’re looking for.
However, it won’t show everyone with that keyword in their profile.
Instead, it will show individuals who have added that phrase or keyword into their name.
2) CoFoundersLab
One of the best places to find people who are serious about co-founding a startup is CoFoundersLab. They have the pay-to-play business model now, so you have to purchase a membership in order to use it fully. However, they recently re-released a free version with fewer features.
CoFoundersLab has a lot of members, but only some of them are serious, so you have to weed through the good & bad ones.
You can also find mentors/advisors and interns there.
Make sure you create a profile that stands out.
Speak about yourself, your experience, your startup and its mission, its business model, what you’re looking for in a co-founder, and what you’re looking to offer.
Just like in dating, never look and act desperate. People will notice it immediately. Play it cool!
3) Going to Meetups from Meetup.com
Another one of the best ways to use meetup groups is to target the meetup group based on desired skill sets.
The benefit of meetups are that people get to see the real you, and vice versa. You can interact with people who have each other’s attention and show your true colors. Sometimes, it’s harder to do that online and stand out from the pack.
If you’re looking for marketers, look for meetup groups in your area that are for marketers. The same is true for any other major skill set.
Request to join those groups. Once you’re approved, you can then message group members online (people use this functionless less frequently) and attend their meetups.
Have a quick 30-second elevator pitch memorized so you can pitch marketers, programmers, or whoever when you’re meeting them.
If you find someone that seems interested based on your interaction, set up a meeting with them to talk about it further!
4) Joining Facebook Groups
Find Facebook groups that match the discipline of the person you seek. Become active within that group and look for people who are also active. Message those people.
Once you’re in the group, post who and what you’re looking for, as well as info about your startup. You can ask for referrals, as well.
Another way to go about finding someone via Facebook groups is to join location-specific groups and perform the same actions.
5) Using Wellfound (Formerly AngelList Talent)
Wellfound is a top platform for finding and posting startup jobs in startups, investing in startups, and finding co-founders too.
There, you can also pay to promote the job role on Wellfound.
But first, you’ll have to create your company profile and then you can start listing jobs or co-founder roles.
Once you’ve completed the process, you can browse through the profiles of people that match your criteria and start messaging them!
6) Using Equity Directory
Equity Directory is an invite-only network of entrepreneurs which you can request access to. Once you are approved, suggestions are emailed to you. Pretty simple, right?
However, at the time of writing this, it lacks specificity of the types of people you want to find.
It’s hit or miss – a nice fallback option that may or may not yield a good result. Therefore, you’re not going to want to solely rely on this method.
7) Using Founders Nation
Founders Nation is another website to find co-founders.
If you’re a jack of all trades, you’ll have to pick your top two skills when registering.
It’s also prohibitive during registration with its use of text formatting. It won’t allow you to move forward until you edit it to become what it will accept.
I was not able to successfully create a profile because of that issue. Maybe you will have better luck.
8) Try Starthawk
They’ve built our platform and search algorithm to make finding a match as easy as possible.
Their intuitive messaging system provides quick and easy communication amongst other co-founders. And their filters allow you to easily narrow down the type of co-founder you’re after.
9) Contact University Department Offices and Professors for Referrals and/or Clubs
This is a great method to find hungry people who want to make an impact quickly. College students are focused on building their skills and careers — especially juniors and seniors. Moreover, there are plenty of graduate students, as well.
You can contact:
- Business schools for business-oriented students
- Computer science departments for developers
- Art and design departments for graphic designers
- English departments for editors
- Any other relevant departments
10) Y Combinator’s Startup School Co-Founder Matching Platform
You can count on Y Combinator to put out a quality product as the godfathers of startup accelerators.
They created a co-founder matching platform for startups who apply to their free startup school and who are approved.
We truly believe that this is the best place you can go to find the highest quality co-founders.
There are a lot of highly qualified people from ivy league schools and other renowned institutions who are eager to make an impact and make the next best thing.
What to Message Your Co-Founder Prospects
Write some drafts about what you want your message to look like first.
A successful message I’ve used to generate discussions with potential co-founders looked like the following script:
Hi Name,
Your work history and profile is impressive. One of the things that really stood out to me was your work at _______ because of _______ accomplishment.
The reason I’m contacting you is that I’m looking for a person with the same skill sets you have, to join as a co-founder for my growing startup, __________.
My startup’s mission is to ____________________. I plan to make money and profit with it by doing ___________ and __________.
I’m looking for someone that can dedicate at least X hours per week and I’m offering a minimum of ____% in vested equity [plus revenue sharing] until we’re full time.
Based on your skills, experience, and description, I think you could be a good fit.
I’d like to explore this great opportunity with you and see if we are a good fit for each other.
Are you interested in exploring the opportunity with me?
If not, do you know anyone that might be interested?
Kindly let me know at your earliest convenience. Thanks.
Best regards,
Carl
Share Your Vision
Share your vision of the company, how you want to run it, and what your roadmap will look like.
Always be honest with what you’re looking to do.
Tell them if you’re looking to do crowdfunding, equity crowdfunding, getting angel investment, venture capital investment, applying to startup accelerators, bootstrap, get a bank loan, etc.
Tell your potential co-founder how much equity you want to reserve for investment.
Let them know if you’re looking for other co-founders to fill different positions.
If you are, share your thoughts about equity splits with them because they’ll want to know.
But don’t just take anybody in, and don’t be too hasty with formally bringing them on board.
Don’t Get too Excited and Bring Co-Founders on Board too Early
The excitement of possibly bringing in a co-founder can get the best of us and we can lower our guards, potentially onboarding people who we shouldn’t have otherwise brought in.
That’s why you’ve got to check yourself and have a process to help you sort through the good apples and bad apples, which we’re sharing today.
But first, do know that you don’t have to go looking for a co-founder while you’re validating your startup idea. And if you’re still in the idea stage, don’t rush into anything formal commitments with potential co-founders right now.
You can do look for co-founders if you wish. However, just make it known to them that you have an idea that you’re working on validating, whether or not you’re in our Incubator Program, and that you’d like to talk to them about possibly coming on board.
When you rush into a formal relationship too early, then you can easily get burned and scarred.
It will create anxiety, resentment, and lots of stress if things go wrong.
That’s why we advise you to proceed with caution regarding making any commitments to potential co-founders or teammates without a strong vetting process and a fully validated idea.
Exercise both mindfulness and wisdom with the process by using the advice we share in this article, and trust me — you will be very happy you did.
The Cost of Picking the Wrong Co-Founder
Do you remember that 23% of startups fail due to not having the right team?
This statistic makes it even more important for you to find the right business partner(s).
You don’t want to rush the relationship because co-founding a startup with someone is like getting married.
And if it doesn’t work between you, separations of co-founders can often get pretty ugly.
While there are plenty of ways you can make a startup work, there are even more ways it can fail.
You don’t want to fail because you brought in the wrong co-founder, and you should not take this process lightly.
I experienced failure with one of my previous startups and it was devastating, extremely stressful, and very costly.
I thought I knew who I was working with, but I was wrong and he turned out to be one of the worst people you could imagine who did some downright dirty and messed up things.
That experience taught me a lot of lessons about who not to hire and how to find better personality fits.
You’re getting the culmination of my experience and knowledge with regards to finding the right co-founder in this article.
More Lessons Learned
That experience led me to taking a role as a senior tech recruiter for a year (2012-2013) at Robert Half Technology (RHT), a Fortune 500 company, where I learned a whole lot more about hiring which I’m going to share with you.
I was trained by Bob Cadet, who’s literally the best in the company’s technology division and he had won several awards for being our company’s top performer year after year, so his standards were very high, and therefore mine had to be too.
Our firm was committed to excellence from its staff and its candidates.
They would not tolerate any bullshit and my boss, Robert (not Bob), was screwing up big time and our branch was suffering. He did sales and I did recruiting and there was nobody else at our branch. His job was to find open roles and my job was to place candidates in them. Robert was a really nice guy, but he was coming to work late, or some days not at all, mixing up client job requisition orders, and whatnot.
There were seemingly some big things going on in his personal life. But it was bad for business. If there were no jobs to fill, there were no people being placed and the branch was taking a big hit. Even though he was my boss, we were partners and his performance made me look bad. So he was fired within four months of my tenure, and Bob, the award-winning guy who trained me, became my new boss and partner.
I was almost fired with him if it were not for other people from different divisions of Robert Half who vouched for my work ethic. They were asking to have me join their division if RHT wanted to start afresh.
And so I got to stay in my role because I did the right things.
That’s just ANOTHER example of why you need trustworthy partners for your business.
And if someone’s life is in disarray, then they’re not going to make a good partner.
Part 2 of the Story
There’s more to this story that will help you with finding co-founders and recruiting your own teammates.
After the culling of the weak, it was just Bob and I running the show for the branch, and he really took me under his wing.
He trained me even more than before.
He showed me that one of the best ways to find people to hire is to make relationships with people in the field with existing jobs of 3+ years in that position or company for our most common placements.
Make friendships with them and build up your network.
Relationship building allowed me to hire based on both personality and skill fit, instead of just shorter interactions where I was looking at a resume, phone screening, and interviewing them once.
It’s hard to make character judgements otherwise.
During this relationship building process, I also learned how to ask the right types of questions that enabled me to gain valuable insights into hiring for personality, skills, job fit, and more.
You’ll see those questions in the personality section of this post.
Those relationships and questions provided me with the insight I needed to determine their character and where to place them if they were willing to accept the role.
We were very successful.
Within a month our branch took off with flying colors. We topped the growth charts every month compared to every other branch in the nation except my last month, before I left for personal reasons at the end of my first year.
The Lesson from the Story
The lesson from this story is that the same strategy can be applied when you’re looking for co-founding candidates or any other person to join your company.
However, there are some very important differences that have to be considered when looking at co-founders versus candidates for a role.
So I’m going to share more actionable advice on on what to look out for and how to check yourself during this process so you don’t get too excited and rush into building a startup with someone who shouldn’t be your partner in the first place.
What to Look for in Co-Founders
There has been a lot of talk in Silicon Valley and the startup world about “hiring rockstar teams.” That’s due to the fact that an amazing team will usually be able to move mountains. If you build a team of experienced, smart, and good-hearted people who are dedicated to your mission, it’s very likely that you’re going to be very successful. Investors know this and it’s why they’re so interested in the team when evaluating a startup for investment.
Crucial Criteria that Co-Founders Need to Have:
- Skill fit
- Personality fit
- Financial flexibility
- Time to devote to the company
- Geographically close proximity
These are five very important requirements.
Building a company from the ground up takes years of your life.
So you have to find cofounders that are in the right phase of their life to do it.
Skill Fit
Co-founders should complement your skill sets by covering the gaps of what you don’t have skills in.
The startup titans say that the best practice is to find people who are as smart as or smarter than yourself.
Surrounding yourself with intelligent and experienced people will yield high dividends for your startup, your personal development, and professional development.
However, intelligence is not the only litmus test that you should judge a potential partner by.
Experience is a result of building strong skills.
It’s best to find people that have as close to five years of experience or more in their discipline.
Did you know that if you work 10,000 hours (or five years), you can gain mastery in a subject? Each year has 2080 work hours (52 weeks x 40 hours) and when you multiply that by 5, you have 10,500 hours.
However, some people are quick learners and they can excel in a role with two or three years of experience.
Don’t count them out, but be cautious when vetting them.
Personality Fit
Did you know that personality fits are just as important, if not more important than skill fits?
Due to this, you want to be very selective when bringing on a co-founder. It’s like a marriage and has legally binding implications as well.
Richard Branson, CEO of Virgin Group, shares how he hires for personality and goes on to say that “if you hire the wrong person at the top of a company, they can destroy it in no time at all.”
It makes sense that you would want to bring somebody on board who has a good value system and good personality.
Right?
So many startups fail because of issues with business partners and you do not want your startup failing because of bad co-founders.
And, you want that person to align with the core values that you want to set for your company culture or startup culture.
From the get-go, as a founder, you should create a value-system for your startup and how it works.
Compatibility Evaluation: Getting on the Same Page
- Shared Vision: Assessing whether both parties are aligned on the long-term vision and mission of the startup.
- Values Alignment: Exploring whether there is agreement on fundamental values such as integrity, transparency, and ethical business practices.
- Working Styles: Understanding each other’s preferred working styles, communication methods, and approaches to problem-solving.
- Conflict Resolution: Discussing how potential conflicts or disagreements would be addressed and resolved within the partnership.
- Commitment Level: Clarifying each person’s level of commitment to the venture and their willingness to invest time, effort, and resources.
- Risk Tolerance: Evaluating individual attitudes towards risk-taking and willingness to embrace uncertainty inherent in startup ventures.
Ask co-founder candidates what values they have in regards to:
- Their work ethic
- How they communicate: Honesty, transparency
- What their best practices and processes are
- Their productivity habits and time-management routines
- Goal setting
- Deadline setting
- Working under pressure
- What do they eat? (processed junk food vs clean, whole food). You can tell a lot about people by how and what they eat.
- How often they exercise (steady exercise increases productivity, mood, and cognitive function), as it’s a measure of personal growth
You should be able to share yours too.
Remember that an individual’s value-system and personality is just as important as their skills and experience.
I would take a person with fewer skills but with a great personality, value system, and tons of passion who’s willing to learn and put their all into a job.
They will usually find a way to meet expectations.
They want to make a difference.
However, what’s most important is that you will need to find co-founders with the right personality fits if you want to be successful long-term.
You’ll need to ask whomever it is, the very vital question: why they want to be a startup co-founder, because you need to know their motivations.
One self-interested person who cares not for the mission but only themselves and the riches they may get, is the antithesis of a good founder.
Yeah everyone wants to get rich.
But it can’t be the main motivation.
Money comes as a result of dedicated and hard working professionals who put in their all to create something of value for their company and their customers.
You’ve got to be in it for the right reasons and have good intentions.
While the goal of your company is to make a good profit from its offerings, it should also be to serve its customers well and solve their need.
The focus should be on working together to accomplish your company’s goals as a team.
This reminds me of a quote I’d like to share by Tim Westergren, Pandora’s co-founder. Don’t know Pandora? It was acquired in 2019 for $3.5 billion in stock. He said, “Make your team feel respected, empowered, and genuinely excited about the company’s mission.”
What he said is so true. A company will do better if its employees are treated in such a way.
And its sales and customer satisfaction will be higher as a result. Because happy employees will make customers happy. It’s a win win.
What’s more, it’s important for you to get to know the person you’re considering on a human level.
Find out what makes them tick because you should be prepared to be dedicated to your startup for up to ten years or longer.
That means a lot of time will be spent with your co-founder(s).
It’s crucial to have processes in place and ask as many questions about people’s character, interests, motivations, expectations, commitments, and dedication to the projects they take on. Ask for examples, but also share examples from your own life to mirror the commitment you desire from someone else.
Whether you’re going to be the CEO, CTO, COO, or CMO, one or more of you will have to become a master recruiter in your early days, months, and possibly even years. Each person will have to hire within their respective specialty, and you’ll need to know what to look for.
Questions to Ask a Potential Co-Founder and Insights on What to Look for:
- What are your motivations in life?
- Look for people who want to make a positive difference
- Would you consider yourself ambitious and why? Do you have a goal that you’re looking to reach?
- If yes, like the previous tip, look for people who want to make a positive impact on humanity in some way
- How much time can you commit on a weekly basis?
- Look for people who can commit 10+ hours a week. The more, the better, as it means you can build and grow quicker.
- How financially flexible are you? How long can you go without a paycheck from us?
- The best people are going to have a good income stream that aren’t reliant on a startup’s cash flow in the first 1-2 years.
- What’s the biggest fear you’ve had and how did you overcome it?
- Look for someone who is courageous and does things even when they’re scared
- How do you deal with problems?
- Look for someone who doesn’t procrastinate problems and can critically think and act about how they can solve them without making emotional judgements
- How do you deal with disagreements?
- Look for someone who can compromise, but also can see the other person’s point of view.
- How would you manage a team?
- Look for someone who can lift others up, and support them. Not micromanaging or tearing people down. Teams need to trust their managers and vice versa.
- How do you delegate?
- Seek someone who will do it respectfully and recognize that who it’s being delegated to has a job to do too. If it’s something you’ve done before, you can take the person under your wing to show them the ropes.
- How would you manage a situation with an underperforming subordinate?
- Find someone who’s willing to get to the root of the issue, use empathy, encourage and uplift that person, and try to help them do better.
- What expectations would you have of your relationship with each other?
- Define what you expect from yourself, how you hold yourself accountable, and the type of relationship that you’d like to have with your co-founders.
- How do you generally work with others? Do you have a process?
- You want to hear them say something along the lines that that they want to learn from their teammates and how they work, define the requirements of the project you’re working on, organize how you plan to work on it together, and set timelines.
- How do you manage your time and energy?
- Find someone who knows how to effectively manage it through time blocking and even better if they are organizing their high brain power activities that require the most energy around the times that they are the most productive.
- What are your favorite things to do when not working and why do you like them?
- Just expect to learn about them and their motivations behind why they do. There’s no wrong or right answer. Okay that’s not entirely true. No alcoholics, drug addicts, arsonists, etc.
- How do you respond to a situation when your back is against the wall?
- The best answer is that they will put their all into their job and improving their situation with positivity that they’ll get through it.
- What is an adversity you’ve overcome professionally?
- Look for the lesson they’ve learned and look for personal growth.
- What do you need to get better at?
- Look for humility and recognition of their weaknesses
- When you don’t know how to do something, but need to get it done, what do you do?
- Look for problem solvers who are adaptable, critical thinkers, and resourceful
- How do you feel about “wokeness,” diversity, and LGBTQ rights?
- Look for people who will support diversity. Diverse startups not only perform better, but have a better cultural impact. And, we think it’s the right thing to do.
- Do you micromanage?
- Look for people who don’t micromanage — who will trust their teammates and give them space.
- What pisses you off in the workplace?
- Too vague to tell you what to look for, except to say that it would be good to find someone that doesn’t like bad or toxic behavior
- How do you approach projects? How do you plan? What is your planning process?
- Look for detail oriented people who use an agile methodology for projects or can break down all of the elements of a project and take a step by step approach.
- How do you communicate best? What has and hasn’t worked for you and why?
- Everyone has their own style, but you’ll need to adopt multiple communication practices. In-person (if you’re in an office with them) and phone or webcam are the most expedient when there’s a lot to say. Email is better for shorter things or things that require written record. Slack or Discord are good for instant communications that might require a short exchange back and forth.
Look at their work history to see how long they’ve been in each position. The longer, the better, as it shows loyalty, dedication, and commitment.
It may feel a little weird, but ask for references on the people you’re very interested in working with. And have some of your of references to supply them with if they want to follow up and do due diligence on you too.
While talking with each other, share how you work (your work ethic) and the expectations you have for yourself and for co-founders.
You can’t ask about health conditions, as it will violate HIPAA laws.
Ideally, you will want to have some common interests with your business partner.
But having something else to bond over beside work is nice to have, but not necessary.
It’s necessary to hustle together, but you need a little downtime too.
Even if you and your co-founder go watch a movie together, listen to some great music, or share a good meal, it will help you to unwind and give you a little something to bond over.
Talk about equity splits and amounts of time they can reasonably dedicate. 10-20 hours a week is a reasonable amount for someone who’s also committed to a full time position.
If everything lines up, you should start working with them on a trial basis. This way you can see how they work and how you work together before you commit to working with each other.
It would be a good idea to check out these 12 Jungian personality archetypes by Carl Jung. Not everyone will fit in one specific archetype but it is interesting and informative nonetheless.
Money and Financial Flexibility
It’s incredibly vital to find out what their financial standing is. A bad financial standing on anyone’s part can deal a huge blow to the startup if they have to leave because of it. Here are some questions to find answers to:
- How do they support themselves? Wife/husband? Themselves? Joint-income?
- Do they have a part-time or full-time job?
- How long can they last on your startup without get paid from it?
- Would they work for equity plus profit-sharing?
Do They Have the Time?
First of all, make sure that they have the time to work on your project.
If they can’t dedicate at least 10 hours a week on top of their normal work schedule, then it’s likely that they won’t be a good fit.
The more time they have, the better.
If you get funded, they’ll be able to get a salary, and thus, should be able to have the time to work full-time on your startup.
But, that increase in time comes at a cost to themselves, which is why you need to have financial flexibility and the means to start your venture.
Geographical Proximity to Each Other
Ideally, you want your business partner to reside in an area that’s somewhat close to you, especially if you’re seeking venture capital funding.
This is because you need to have a cohesive group of people who are used to working together, both in person and remotely. An hour drive is the maximum amount of time you should ideally want between you.
When your team is splintered, it makes it more difficult for investors to want to invest in your startup. Half of their investment is based on the team. The other half is based on your startup and its traction.
Even if you aren’t looking for investment, having a geographically close team will be beneficial.
You and your co-founders can then attend nearby events together, have real in-person meetings, and learn more about each other.
Working Together on a Trial Basis
Assuming they meet the four requirements, they give you good answers to your questions about them, and you get along well with each other, then it’s best to start working on a project with each other.
This way, you can see how they work and how you work together before you commit to working with each other.
It would likely be aspect of idea validation or early startup foundational or even technical development.
Don’t leave the project open-ended. You should define the scope of the project and the desired outcome that you and they are looking to achieve.
You should not have to sign any NDAs or anything at this point, either. Some people will insist. It won’t do any harm, but 99% of the people out there don’t want to steal an idea. It is only after you have a couple or more successful trial projects that you should move forward with formal paperwork for a co-founder agreement.
Moreover, we recommend that this process of formal paperwork doesn’t occur until you have successfully validated your startup idea.
Because if it becomes invalidated, you can remain friends, of course, but the startup becomes nullified.
Red Flags to Watch Out for
How do you spot the bad intentions of bad people and see the red flags?
Well, I’m going to share a handful of bullet points of red flags and then we’ll go over questions to ask that will help reveal the true personality of the potential co-founders or teammates whom you interview, so you can spot many of these early.
Watch out for the following personality traits during your conversations with people, as they’re huge red flags.
- When a person cuts corners
- Doesn’t care about consequences, especially legal ones
- Doesn’t plan
- Egotistical
- Doesn’t learn or want to
- Doesn’t engage with others
- Has self-destructive habits
- Someone who hops to different jobs every year
- Doesn’t have empathy
- Doesn’t know how to support others
- Seeks fun more than results at work
- Extremely disorganized
- Not detail oriented
- Flaky
- Passive aggressive
- Aggressive
- Dishonest
- Indecisive
- Overconfident or cocky
- Unfocused
- Braggadocios
- Stubborn or fixed
- Apathetic
Some are worse than others, but most of them are pretty bad… Having several of these traits will mean that they are a bad fit and that you should look elsewhere.
Yet, these red flags are hard to discover unless you have several conversations with the person or if you’re actually working with them.
We will discuss the questions you should ask to reveal many of these traits shortly.
What if You Already Have Friends or Teammates that You Want to Start With?
If you have started working on your idea together with friends, connections, or colleagues from work, then it’s still possible to make things work.
If they have the aforementioned red flags, then it’s going to make your journey harder.
Co-founders with these red flags must display the utmost determination to improve, followed by action. They have to be in it for the long haul because becoming a co-founder is the equivalent to getting married. But there are sometimes even greater implications as it involves many people’s lives throughout the lifecycle of a company. They need to be committed and invested in the startup and should want to consistently contribute towards the overall mission of the company.
Everyone needs to be brutally honest about their own character and possible shortcomings or flaws and create a plan to overcome them.
You owe it to each other and to the business you intend to start. And a true friend who realizes they truly don’t make the cut would bow out so someone more qualified can take their place.
In the end, being a good leader is about leading by example, having good relationships with your teammates, improvement, and serving your customers/market to the best of your ability day in and day out.
You will become leaders, so you’ve got to walk the talk.
How to Minimize the Risk of Choosing the Wrong Person
You can always minimize the risk by making new co-founders sign a 2-year vesting agreement with six to twelve-month cliff (one-year is better).
Vesting allocates their equity to them on each quarter over a span of two to four years. This way, if they leave before their vesting is finished, they keep what they earned and leave the rest to your startup.
The cliff is like an insurance plan because if the new co-founder doesn’t work out within the year (or however long you choose the cliff to be) and they leave or you have to fire them, your startup won’t lose any equity from that person leaving.
Equity matters even more if you’re planning on raising money for your startup, and it’s important to communicate that to your co-founder candidates.
It’s possible to raise money with VC’s as a solo-founder, but it doesn’t happen nearly as often as it does with teams with good co-founders. Investors like to invest in teams that will succeed.
So if you want to build a great team and not get destroyed by losing a teammate, make sure that you build in a vesting schedule with a cliff for each co-founder.
Tips on Reaching an Agreement
Once you and your potential co-founder have gone through the process and decided you both want to work together, it’s time to set clear expectations.
The expectations should be specifically expressed in a partnership agreement with the amount of equity that will be split up. Usually, it’s best to play it safe by putting your new partner on a vesting schedule that gives your new co-founder equity over each financial quarter.
The amount of time spent on your startup each week and by each individual should be clearly expressed, as well.
If you decide to split the equity 50/50, then you must create a framework of how disagreements will be handled and resolved. Usually, it’s the CEO that has final say.
Even if it’s not a 50/50 split, it’s a good idea to figure that framework out and communicate that in writing to your new co-founder.
But make sure that you discuss equity splits with each other and can come to a conclusion.
Remember, any partnership is a give and take.
Nobody will ever get everything they want. That’s the hallmark of a good deal!
Non-disclosure agreements are mainly a thing of the past for most founders seeking co-founders, but there are some instances where it is still appropriate.
Most people are not looking to steal others’ ideas. They’re focused on their own ideas too much or joining a team that is working on a great idea.
However, you can issue a non-compete agreement to your new co-founder if it makes sense for you.
However, when that time does come, it’s going to be important to have some protection.
Below are some tips that will help you protect the startup when you do decide to work with someone:
- Create contracts or co-founder agreements with agreed-upon expectations
- Create accountability clauses that will trigger when expectations aren’t being met. It should say what will happen if something doesn’t occur over a period of time.
- Vesting agreement
- Have a payment schedule based on when monetary milestones/goals are hit
If they don’t want to sign anything or dodge doing it, then that is a red flag.
They’re likely to be pretty shady if that occurs.
You need people who will be accountable in any business, but even more so in a startup, where so much hangs in the balance.
Conclusion
There are a lot of things to consider when finding and choosing co-founders. Make sure that you go about it with a process and seriousness.
You should really only be working with positive people who can and will reinforce a good culture with their teammates, and who have the traits and drive to excel.
If you dedicate 1 hour a day to prospecting, you should be able to find someone within a couple of months of steady effort. This will keep you pretty busy on your search for a co-founder, but it will yield results.
