You won’t raise investment if you don’t have a co-founder?
“Yeah you need a co-founder otherwise you will find it really hard to raise money” I hear a lot and shock horror is untrue.
The Co-founder debate has been going on for many many decades.
You will hear arguments such as:-
"You need a technical co-founder to lead Tech"(probably one of the most common ones)
"Being a founder is lonely at times and you need support"
"Investors like to spread the risk between founders"
The above are concerns, I come across these conversations all the time, but they are not fixed, just by a cofounder being the answer, there are other ways.
Remember bringing in a cofounder is like meeting someone, sharing part of your life with them, your home, everyone pays their way with money and effort and then you decide after a few years you are done and wonder why the person you were with has a lawyer asking for half your house. This is no different and you are asking them to commit massively to your business, impact their life and by default give them equal status.
So let’s take the first quote,
Technical Cofounder - So I see this all the time, either going really badly earlier on or down the line. I also get asked by a lot of non-Tech Founders, “should I go and get a CTO founder”. My usual advice is this:-
Learn some more about the tech you are building. It is after all your company and you wouldn’t just ignore the finances or tax etc. At least get an understanding so when you know you are being taken for a ride.
Do you know what a CTO does? If you did, you would soon realize that you need a lot more hands-on in most cases and not someone to just do the vision side, which is valuable, but if you are early days, then it’s about the doing.
Get a CTO as an advisor on board. And not one who has done one company, one who has done a few and also probably started life as a Junior dev and been through the exact phase your company is going through.
Find a senior engineer, or maybe even experience just before senior who is hands-on, full of energy to build something, and has apparitions to one day become a CTO/Co-Founder.
Being a founder is lonely and you need support.
Drives me nuts this one. A lot of things are lonely and a lot of things need support. Seriously if this features massively on your list then question being a founder. On the support side, you again have other options that I would strongly suggest over a co-founder.
Support, mentors, advisors the list is endless. Yes, you may have to pay them or give equity, or both, but there are plenty of ways to not feel completely isolated. I also view advisors, that you are paying 10% for 80% of their experience. Also if you are dating someone, married to someone, get their buy-in to what you are doing, they will be your rock through any storm trust me.
Not one for me, for very obvious reasons, but a lot of groups, networking hubs, etc that other founders mix in. Don’t end up just patting each other on the back but you might find some great support.
Leadership coaching. I know a lot of founders, who do this at varying times of their business journey.
Investors like to spread the risk and not have all the investment on one founder. So this can work in, many many different ways. Personally, if I had an investor who was worried, I would say to myself I am a bottleneck on my business and need to figure this risk out anyway.
Make sure knowledge is spread across the business.
There is no doubt that Founders are valuable in companies at all stages to a point. If investors feel there is a plan to spread the risk at the senior level and keep you to it, then you should be ok.
I have always taken the view co-founders were not needed. But then I am Grumpy for a reason and it's just not what I would do. Trust me, it's taken me 25 years of getting to know my best mate before I did the whole Co-Founder thing with Kevin. However having a co-founder is a way that works, but only one of the options you can choose. The biggest concerns I have, having seen this happen multiple times is:-
The difference in vision, that gets a band-aid on differences for a bit and then ends up, to use the marriage example, a divorce. Hence why I always ask co-founders does the shareholder agreement covers divorce. Deadlock and mediation ruin companies and people.
You wouldn't go on some TV program, to meet someone for a day and get married, would you? Ok some people do, but let us face it, the odds are not good, and just look at the work it takes people to put into a marriage, this is no different. If there was a “dating for co-founders “ book, I would tell you to go read it. But find a way to get to know your Co-Founder as an investment of your time.
Use the early stage of building your company to really understand, what's needed of you, those gaps, those good points. Understand the team, the customers, and then make a decision you need to take the big leap. At the same time, don't go burning time looking for something you think you should have when you could be busy building sales and looking after clients.
David Murray-Hundley “The Grumpy Entrepreneur”