If you’re reading this article, you’re very aware of the value that a co-founder can bring to your startup. Co-founders allow you to take time off, keep you accountable, mitigate risks for investors, and ultimately help you scale your business. But the problem for many early stage founders is that you may not know how to start the process or where best to look for a technical co-founder.
Since you’ve already assessed your needs, the next step is to identify the roles and archetypes that comprise a successful startup management team. Doing so will help ensure that you’ve covered all of your bases with a complementary blend and balance of skills across your management team.
The Co-Founder Dream Team:
The Hipster, Hacker, and Hustler are the holy trinity of the ideal tech startup team. This theory suggests that there are three key co-founder archetypes that offer a set of combined skills for startup success.
The Hipster:
The hipster is your designer or your marketer. This person is engrossed with all things design and experience. Hipsters want to create unique products and often pursue unusual ideas. The hipster is in charge of making a product marketable and ensuring that it delivers the best customer experience.They also set best practices in marketing, brand building, and the look and feel of the product. If you’re looking for a technical co-founder, you may very well be the hipster on your team, in search of your complementary Hacker.
The Hacker:
The Hacker is your engineer. This is the person who will build your product (i.e. your technical co-founder) who is often characterized as half human and half machine. They’re highly analytical and skilled in the areas of data and code. The hacker creates the algorithms, intellectual property and is instrumental in choosing the coding environment and platform for the start-up to sustain growth.
The Hustler:
The Hustler is the business savvy person, they’re the key to selling a product to the masses. They generally are charismatic and charming with an extensive network. The hustler builds and inspires the team, manages projects, forms partnerships and guides the team along the journey, while creating and strengthening its culture. In addition to being sharp with words, the hustler is keen with numbers which makes them the ideal co-founder for making investor pitches and tough decisions.
The above is not an exact science. You may be a hybrid of these three archetypes, but it illustrates how important it is to have a balanced team that focuses on their unique strengths, when you seek out a potential co-founder.
An Investor’s Perspective:
Investors want to see a complete team with healthy dynamics that has all of the skills to run the company successfully. Johan Van Mil, Co-founder and Managing Partner of Peak Capital, prefers founders of the startups to have one focus and specifically seeks out the Hustler, Hipster and Hacker when making investment decisions in startups.
We don't invest in single-founder startups...There needs to be a Hacker: Their focus is on developing and building the product. Hipster: Their focus is all about the customer perspective and user interface/front-end (UI/UX). Hustler: They have the personality and they're really aiming to do things as the face of the startup. Founders, based on their role, should have one focus.There are only 24 hours in a day. Where are those hours focused?"-Johan Van Mil
How and Where to Find a Co-Founder:
Craft Your Co-Founder Pitch:
As with most major life decisions, it’s best to prepare yourself. Before you cast out your net and start prospecting for your next co-founder, a best practice is to work on your elevator pitch for a co-founder in the same fashion as you would if you were pitching to an investor.
When pitching your startup idea or business to a co-founder, you can use the same slide deck that you would use to pitch investors for funding, and be sure to:
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Be clear and specific
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Avoid buzzwords and adjectives
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Identify demographics
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Specify your market
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Clarify the buyer
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Solve a problem and offer a unique value proposition
Ask Important Questions:
Additionally, you’ll want to prepare for a potential meeting with a co-founder by having a list of questions written in advance. Include the overlooked and hard to ask questions to explore compatibility early on. Review this list of 34 questions to ask a potential co-founder to identify key questions relevant to your startup. Some of the tough questions you should ask here include:
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How do you deal with stress and big challenges
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Have you ever failed at anything
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How do you deal with conflict
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Who is going to be CEO (and why)
After you’ve prepared your pitch and list of questions, it’s time to begin your search.
Start With Your Personal Network:
The best place to begin your search is within your personal network. Evaluate your first degree connections. These are the people who you know personally, preferably within your desired industry, and with the desired skill sets necessary to fill the role.
If your first degree connections don’t yield any results, opt for your second degree connections. At this stage, you want to ask yourself, who do you know that has a large network of people who could offer you a match. Be sure to explore your entire startup ecosystem including:
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Colleagues
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Venture Capitalists
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Lawyers
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Accountants
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Consultants
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Recruiters
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Other entrepreneurs and more
No Network, No Problem:
Not everyone has an expansive network. Many founders seek out co-founders for that reason alone, because it’s paramount for reaching customers, growing a team, and raising funds. However, all hope isn’t lost. Many successful startup teams have met via cold outreach or even from a job advertisement. Similarly, you can hire a recruiter or place an ad on job boards like:
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Dice.com for technical hires or Builtin.com which offers job posting services and local resources for entrepreneurs.
Join a Co-Founder Matching Platform:
Now there are several co-founder matching platforms to help entrepreneurs succeed with this particular goal in mind. For more ideas, visit FI's find a co-founder FAQ guide. Two of the most notable co-founder matchmaking sites include:
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Co-FoundersLab has one of the largest networks of entrepreneurs on the internet (over 400k) that offers a free matchmaking service for entrepreneurs seeking a co-founder, advisor, or even a teammate simply by filling out your profile and taking their assessment. Users can upgrade to premium pro plan, which offers, filters recommendations, and other perks and resources.
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Tech Co-Founder is a niche offering from Co-FoundersLab that focuses solely on tech partners. Similarly, it boasts of a network of over 300k entrepreneurs offering a simple directory where founders can seek out developers and engineers and choose from a free and premium plan.
Register for an Online “Remote” Co-Founder Event:
One of the best ways to find a technical co-founder is to just put yourself out there. With the post Covid-19 environment, startup founders have become more receptive to taking on a remote co-founder. Remote networking has its advantages because it allows you to gain access to a pool of talent from around the world. And many entrepreneurs have been able to build healthy co-founder relationships remotely and even close a round of seed funding as a result.
A notable online event that provides an opportunity to meet a remote co-founder is Founder Institute’s “Networking for a Remote Co-Founder Event.” This event is hosted monthly and provides you with an opportunity to network with other entrepreneurs across many different regions looking for a co-founder through group and one-to-one networking sessions.
Additional Places to Find a Technical Co-Founder Include:
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LinkedIn.com - An excellent place for remote networking, and to demonstrate your knowledge, credibility and leadership expertise
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Meetup.com - Start or join a local Meetup about startups and entrepreneurship to meet other like minded entrepreneurs.
Test the Relationship: Date First
The co-founder relationship is like a marriage. It’s important to take time to get to know how you and a potential co-founder will work together. After several meetings, create a project with clear deadlines that you both can work on. This will help you to gauge compatibility, interest, work ethic, and see how a potential co-founder works under pressure.
You can also do this by inviting them to a Startup Weekend. Start-Up Weekend, developed by TechStars, now provides a fully remote global experience. You get to meet the movers and shakers of your community, build a product, and a team, over a single weekend. It’s a great opportunity to see how you work with a potential team member and many entrepreneurs have met their co-founders after attending one of these events.
If all goes well it's time to formalize the relationship and make the offer.
How to Formalize Your Co-Founder Relationship
Consult a Business Attorney:
Founding a startup comes with its own set of challenges. While you’re not expected to be a legal expert, you are required to comply with the business laws that govern your industry, so it’s best to consult a business attorney.
Tap into your network for referrals for a startup attorney. You can also access one of our startup ecosystem canvases in your location. Scroll down to the “Develop and Formalize” section to review a list of attorneys and additional legal resources available to you in your city.
Determine The Equity Split:
Splitting equity with co-founders can be a sensitive subject for entrepreneurs. While there are no right or wrong answers, it's very important to have these discussions at the very beginning of your co-founder relationship.
While there are numerous ways to split equity between co-founders, Dan Shapiro, CEO of Glowforge, covered this topic in a GeekWire article advising, “The only wrong answer is a 50/50 split.”
Helpful Tips:
Shapiro advises that ideally, each investor contributes an equal amount to the company. That, plus their labor, earns them their “founder shares”. Here are some additional considerations:
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Whoever came up with the idea gets more
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Whoever provides the most funding gets more
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Full-time founders should receive more
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If you’re the CEO, you’re entitled to more equity
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Reputation is important for equity entitlement
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Download the Equity Split Worksheet to determine the split.
Include a Vesting Schedule
Establishing a vesting schedule means that the co-founder will earn the shares over time. It protects you and the company if the co-founder leaves your company or doesn’t pull their weight. The standard vesting period is four years, with monthly vesting of shares. Unvested shares should be subject to re-purchase by the company if the co-founder leaves the company.
Present Your Offer:
Once you settle on how you’d like to establish the equity split and management roles, present your offer to your potential co-founder. This may consist of an on-going set of negotiations until you've both come to an arrangement that you’re both comfortable with.
It’s important that you make your deal with your co-founder clear, and have it documented in writing. You can get sample contracts of what other people do in your industry like the Fast Agreement. Founder / Advisor Standard Template (FAST) is used by tens of thousands of entrepreneurs and advisors per year to establish productive working relationships, trading advice and support for a standardized amount of equity.
This will hopefully get you off to a good start. This is just the first of many important decisions you’ll be making together for the rest of your company’s life!
Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $1.75BN in funding, and building products people love across over 200 cities worldwide.
See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey.
