I once read a question on Reddit about this subject and why they’re highly sought after. There are several reasons for this.
If I have to think of the most significant ones, those would be:
- Lack of certain skills
- No cash or runway to hire
- Getting investment ready
- Liabilities & risk of ruin
- Growth & management
Lack Of Skills
Recognizing your blind spots and acknowledging your weaknesses can significantly hinder your business or growth.
For example, if you’re not a developer or have limited programming knowledge, it would make more sense to onboard a technical co-founder to close the skill gap.
You don’t want to face slower growth because you’re limited by your skills.
A co-founder can solve that problem if there’s no runway for hiring.
Getting Investment Ready
Not everyone, but many founders, try to raise outside money in their pre-seed or seed rounds. Whether that’s VC or Angel investors depends on the deal size and stage.
Most angels or venture capital firms allocate approximately 30% or more of the value to the founding team, not the business itself, but rather the team.
Flying solo is a huge risk. Especially in B2B.
It’s about de-risking yourself and the business, especially when you’re seeking outside capital to fuel hyper-growth.
When there’s a co-founding team that covers the entire spectrum of skills, the chances of getting funding will increase.
Co-founding teams project strength and confidence, which solo founders lack when approaching investors.
Investors are the risk takers, and they aren’t thrilled to commit to a startup or business that’s run by a single individual with no backup or co-founding team.
Growth & Management
The “wearing too many hats” phenomenon is real with solo founders.
Even though I was in a similar situation 20 years ago, being alone will limit your growth.
The real pain was managing all the moving parts, including possible contractors and different areas of the business.
Having a co-founder can help you manage, streamline inefficiencies, and solve bottlenecks that hinder your workflow.
Final Word
While it’s true that founders may be obsessed with finding a co-founder, I suggest you change to a different perspective.
Instead of viewing it as an obsession, think of it as a rational and strategic choice.
It’s okay to share or give up a portion of your equity to a skilled co-founder.
Startups have a 90% failure rate, and the majority are run by solo entrepreneurs who lack runway, skills, or business acumen.
The right co-founder(s) can reduce that failure rate.