Starting your business with a co-founder means you’ll have more support and resources, but you’ll also give up some autonomy and financial benefit, since you’ll be sharing your profits. There are many factors to consider when making this important decision. Let’s consider the pros and cons.
Is one the loneliest number?
Benefits of having a co-founder include:
- Shared responsibilities
- Moral support
- Help with tough decisions
- More resources
- A larger network
- Investors like co-founders
- Two perspectives can lead to better ideas
As you can see, there are many benefits of having a co-founder. You will be able to share your workload and have someone to bounce ideas off of. Starting a new business can feel overwhelming and difficult. A co-founder can offer you emotional support and pep talks when you really need it. Having a fellow decision-maker takes off some of the pressure and can lead to better decisions. A co-founder brings their own resources to the business, including money and connections. Working with a partner can help you secure funding because investors like startups with more than one owner.
Too many cooks in the kitchen?
Drawbacks of having a co-founder include:
- Personality conflicts
- Decision deadlock
- Sharing profits
- Difference in work standards
- Mismatch of goals and priorities
Co-founder conflict is a common cause of failure for startups. It’s risky to start a business with someone you don’t know well. New businesses can be stressful and you’ll face difficult situations together. It’s good to have a sense of how someone handles stress and conflict before you agree to partner with them. You may also run into decision deadlock when your opinions don’t match up. In addition, your co-founder’s idea of a hard day’s work may look very different from yours, and that can lead to resentment and frustration.
If you do choose to partner with someone, it’s essential to discuss potential problems ahead of time and to make an agreement that sets boundaries and expectations.
What are the features of a good co-founder?
Interview potential partners. You should also ask for references and try to determine if they have the following qualities:
- Complementary strengths
- Similar goals and values
- Good conflict resolution skills
- Emotional intelligence
- Ability to collaborate
- Willingness to be flexible
- Curiosity and love of learning
It’s key to find a co-founder with similar goals and values to your own. A difference in core values is one of the hardest obstacles to overcome. Ask any potential partners how they envision their life and career in the future. What is their 12 month, 2 year, and 5 year plan? Does their vision of the future align with yours?
Maturity and emotional intelligence can be hard to find. Make sure that your co-founder can handle constructive criticism and stay rational during times of conflict. Have they had experience working on teams? Can they recognize and manage their own emotions? Do they have the ability to recognize your emotions and see things from your perspective?
Don’t forget to create a founder agreement
If you do decide to start your business with one or more co-founders, it’s essential to create and sign a founder agreement.
The agreement should include:
- Ownership parameters
- Each person’s role and responsibilities
- An exit strategy if one person decides to leave
- Money invested by each person
You can visit rocketlawyer.com for a sample founder agreement to get you started.
There’s so much to consider when starting a business, and the decision to start with a co-founder shouldn’t be taken lightly. All warnings aside, taking this journey with a partner can be fun and rewarding. If you are someone who needs to talk things through before making a decision, or you know you perform best when being held accountable, working with a co-founder might be right for you. When making this decision, consider your long term business goals and your own personality. What will working with a co-founder look like on a good day vs. a bad one? Does your best work come from collaborating with others or working by yourself? Asking yourself these questions will help you decide if starting your business with a co-founder is right for you.
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