Startups run by individuals fail more often than those with a founding team. It’s reasonable to give up a portion of your equity when:
- You’re wearing too many hats and can’t manage the scope of work
- You’re lacking a critical skill to find that breakthrough
- You’re considering outside capital (VC, Angel investors,…)
- You don’t have the financial runway to hire experts, contractors or employees
If you feel that one or more items are on your radar, then you’re more likely to entertain the idea of having a co-founder.
But finding the right business that aligns with your vision and the DNA of the startup is not an easy task.
I observed too many people jumping on the wagon too quickly with random strangers on the internet after a 5-minute conversation. That’s just asking for trouble.
Instead, try to go local first. At least the same country of residence.
Try to find a co-founder in your direct environment through real-life networking events, meetups, and even in co-working spaces.
If you’re guided by a coach or startup mentor, ask them if they know any potential candidates. They’re familiar with your business, situation, and weaknesses, which makes the filtering and selection process easier.
If you’re not living in dense areas or startup hot spots, then you should build meaningful relationships with people you trust or know for a while, before popping that question.
Equity is highly valuable, and you’re willing to share it with the person who believes in your startup idea.
Consider the following:
- How long have you known each other?
- Does that person have the same willpower as you?
- Are they organized?
- What can they offer, and what skills are you lacking?
- Do they have enough experience in the industry?
You can make that list with questions as long as you want, and that’s okay. A vetting process like this can make or break your success.
Don’t take the bait with people who are overly enthusiastic and start asking for collaborations or partnerships faster than.
If you feel the conversation is going well, then keep an open mind. Figure out if they are organized, disciplined, and are the right fit.
Do You Need A Co-Founder?
If the answer is:
- I plan to raise money
- I plan to build something bigger than a micro business
Then yes.
Most funded startups have 2 or 3 co-founders. Anything over 3 can get messy.
Solo founders aren’t the most attractive demographic for investors. Simply because the entire business depends on you, and that turns into a single point of failure with no backups.
Most investors count the team as 30% or more of the valuation of your business.
Early-stage startups need to understand that there’s less weight in the idea or product. What matters is the cohesiveness of the founding team.
Plus, if you’re not looking to build a micro business, then co-founders are desired.
Anything under 5 million in annual revenue can be considered a micro business, and that might look like a big number, but I know plenty of founders who make around the 5 million mark with only outsourced help.
Where Do I Find Co-Founders, If Not Locally?
There are plenty of options, and if I had to start over, I would consider:
- Joining free or paid communities on Discord to network
- Join relevant Reddit forums and participate proactively
- Share your thoughts and journey on a personal blog, which can add to the credibility factor
- Comment once or twice per day on social media without promoting the business
- Participate in virtual startup events
Final Note
Remember that equity can be very expensive, and you want to negotiate from a position of strength, not weakness, when finding a co-founder.
Relationships are built fast, but very hard to maintain. Take it slow, building meaningful relationships, or even cold email some for a coffee chat first.
Ask yourself, without delusions, where you want to be in 5 years from now.
Don’t rush into critical decisions that can determine the fate of your startup.