A co-founder is any individual who starts a company or other business venture with the help of other people. Whilst a founder is usually the person who has defined the business, he/she may not have the adequate finance, technical skills or expertise to put this into practice. A co-founder is a person who accompanies the founder in establishing the company.
Why should I hire a co-founder?
In many scenarios, hiring a co-founder is the first opportunity you will have to get a genuine partner you can trust. This should be someone who challenges your assumptions and starts conversations, not just a ‘yes-man’. Hiring a co-founder can:
· Add additional perspective – in some cases, they may have expertise in a certain topic
· Allow you to share financial responsibility and stress
· Provide emotional support
· Attract talent to the company
· Mitigate the risk for investors, as this is usually a more attractive business model as there is shared accountability
It is important that a co-founder and you have a shared vision, allowing you to have the same core values and fundamental building blocks of your company.
Is this for me?
Although we have looked at the benefits of hiring a co-founder, you must also consider whether this is right for your business structure by considering what you are looking for. If you need a specific skill, it may be best to think about hiring a technical consultant, if you are simply looking for business advice, you may want to consider creating an advisory board.
It is usually important to lay the groundwork of your company first, so that you may see the gaps in your set of skills and know what kind of person you need by clarifying your own strengths and weaknesses as an organisational leader. You must also consider what you are expecting the co-founder to do. It is good practice to find a peer who can challenge you and support you in equal measure. You must also consider how decisions will be made, budgeting decisions, pricing and how you’ll fund your venture. Larger businesses usually need a co-founder, to provide accountability and innovative ideas.
How would I go about this?
Hiring a co-founder is a decision that should not be rushed, as it is a more permanent role than an advisory board or permanent employee who can come and go. A co-founder is often an equity partner and so may be tied to the company for the long term. The first step you may want to take would be writing a job description to clarify what you need. You may then want to start networking, especially if you are a small business owner, reaching out to as many people as you can in order to expand your network and have a larger audience. You may also use social media platforms such as LinkedIn to advertise your search for a co-founder. Organisations such as CoFoundersLab and StartupAgents act like tinder for finding entrepreneurs, you can keep swiping to network with anyone you feel may fit the skill set you are looking for.
What if things go wrong?
Despite a co-founder being a business relationship for the long term, things don’t always work out and you may find that their skillset is clashing and the relationship isn’t working out. In such cases, it is important you have set up a vesting schedule for protection in this situation, for the shares you give out. This is usually over a period of a few years, so if it doesn’t work out, whoever is left in the company can continue to run the company with a majority of shares.