Building a start-up can be hard—even when you have the right technical capabilities. You may find yourself stressed out by having to manage so many different moving parts at once, including creating a profitable product, kicking off marketing, and dealing with necessary (and often stomach-churning) paperwork.
With that, finding co-founders who are willing to take ownership of tasks you may not enjoy or aren’t good at, may accelerate your growth and help you move to the next level.
At Ramen Club, we’re sharing a guide on how to find cofounders suitable for you. In it, we will touch on:
- The importance of having co-founders
- Where to find and find cofounders
- Common mistakes when looking for co-founders (and how to prevent them)
- Co-founder agreements
- Alternatives to co-founders
The importance of having co-founders
Most of us already know what co-founders are: people who have decided to build and grow a business together. But what additional value can they bring to a venture that is different from doing things alone?
- Co-founders can grow and scale different processes in your company
For example, an online video editing platform called VEED, uses the specific skills sets from both its co-founders, Sabba Keynejad (Awesome Ramen Club member) and Timur “Tim” Mamedov, to optimize productivity and quality.
While Sabba leads the product development and growth aspects of the company, Tim manages everything related to technical work. This synergy works well because both co-founders use their matching expertise to take ownership and grow different sides of the business at the same time.
- They offer better moral support
Many first-time founders quickly realize that growing a company can be an isolating experience. Even when your friends are willing to listen to your problems, they’ll never fully understand the stress and responsibilities involved in building a business.
And the same goes for employees. In fact, you might even feel compelled to hide your concerns to keep the morale strong. Co-founders tend to offer better moral support through challenges because all parties are going through the same things.
- You’ll have a much easier time getting funding from institutional investors
It’s a well-known fact that start-up investors prefer to work with co-founders. By having more decision-makers responsible for building the business, there are fewer risks of the venture folding, making it more attractive for investing in. Well, at least, that’s the logic behind it.
How to find and find cofounders
- Join (virtual) co-working spaces and networks
At Ramen Club, you can find passionate people building a side project or willing to take on a joint venture.
- Take things public on Indie Hackers, Reddit and social media
Make the process of building your start-up publicly known. Share milestones on websites like Indie Hackers, where you can post your experiences in the Building in Public group and join specific groups for people looking to partner up.
Otherwise, interacting with other specialized groups may help you find a partner with different expertise. You can also talk about your business on relevant subreddits (e.g., /r/EntrepreneurRideAlong and /r/startup) and connect with others on social media platforms, like Twitter and LinkedIn. Let people know you need a co-founder.
- Reach out to former colleagues
If you’ve worked directly with someone, then you already know what they’re good at, as well as their work habits and how this can potentially benefit your start-up.
- Participate in hackathons and similar events
Choose hackathons and events that involve working with a team. You may find people you’d want to take on as co-founders.
- Use your online network
If you have connections on social media, ask them where they think you should find potential co-founders with the skills you’re looking for. They might even refer you to someone who is a great fit, or even be one themselves.
- Contact friends and family
Think of the Collison brothers, who founded the hugely successful financial services company, Stripe. Friends and family can work well as co-founders if you are able to understand their commitment levels, boundaries, and capabilities.
- Join Facebook groups
Facebook Groups, such as the Productized Community and local start-up groups, may help you find like-minded people or others interested in pursuing a certain type of online business. Examples include SaaS groups, online marketing groups, marketplaces, etc.
In addition to these, there are many Slack Groups, subreddits, forums, and other online platforms that can help you find people to work with. To be successful, you need to be creative and actively on the lookout online.
Common mistakes when looking for co-founders (and how to prevent them)
“It is a bad idea to start a business with your best friend. It is also a terrible idea to start a business with your wife or your girlfriend. You will end up friendless, divorced, or available depending on the scenario.” Gordon Miller
Looking for co-founders isn’t always a straightforward process. There are countless horror stories about start-ups failing due to disputes. This is why you need to exercise caution when deciding to onboard someone (or not). Here are some things to remember in order to prevent these sorts of scenarios from happening:
- Ensure there is no misalignment in values and vision
Make sure you clearly explain what your company stands for and how you want it to grow in the long run.
- Consider not having a co-founder as a limiting factor
Build an online audience around your personal brand to help you with marketing and sales later on.
- Avoid having more than one CEO
Having co-CEOs at a start-up that aims to be fast-paced when it comes to making decisions isn't a good idea. No matter how many co-founders you have, there needs to be a founder-CEO that has the final say on how to grow the business.
- Prioritize compatibility when it comes to growth
You need to be aligned on what it takes to grow your venture, from product development decisions to your marketing strategy.
- Run from incompatibility or lack of skills
Founding a company means taking on responsibilities. Your co-founder(s) must be responsible for growing parts of the company you may not specialize in. In the same vein, you may also need a co-founder with proven experience.
- Foster trust
While building a start-up should be predicated on a model of trust and collaboration, you need to ensure your co-founders will be accountable for their responsibilities and tasks.
- Think thoroughly about equity terms
When the start-up does become successful, the co-founder who put in more time and effort may regret having given the others too much equity. Splitting the equity equally can often lead to money-related conflicts.
Avoid these issues by re-evaluating the equity some months into the business or when it’s seriously starting to get traction. Base your decisions on the value, time, and effort the founders have contributed to the business.
You also need to set vesting restrictions. It would be unfair for departing founders to keep their equity, after all.
- Not setting up a partnership agreement
You must define your rules for engagement. This is what we’ll be touching on in the next section.
Setting your co-founder agreements
Partnership agreements help you and your potential co-founders establish expectations and set terms on many different things. If confusion arises, you can always come back to this document to check if the terms are being met or not.
Defining these also prevents unwanted scope from happening, such as other co-founders forcing you to work more hours on a project than what you’ve clearly agreed upon.
Things to include in a co-founder agreement:
- The number of hours per week/month each person will dedicate to a project
- How to split equity between co-founders and employees
- Salary and compensation between co-founders over time
- Setting a vesting schedule and rules
- The roles and responsibilities of each founder
- Defining the mission, vision, and values
- Simple ways of measuring success (depending on the tasks each person is responsible for)
- What happens in case a founder leaves or gets removed
- How to handle disputes
- The process for company dissolution
Alternatives to having co-founders
Here are other options to splitting a start-up’s ownership between different people:
- Go solo
If you have the technical capabilities and all the necessary resources to grow a venture, then it might be worth going at it alone and learning about marketing and sales later on.
Ramen Club has many solo founders, including its own, Charlie Ward, and host of the Indie Bites podcast, James McKinven, who can help you figure out how to be a one-person team.
- Be part of an entrepreneurial network like Ramen Club
They will provide access to some of the brightest minds to help you grow your start-up. In these spaces, you may also be able to find other founders who have experienced the same challenges you are facing and offer well-needed moral support to help conquer mental roadblocks.
- Hire interns or entrepreneurial contractors
These largely depend on your budget, but if you have the cash to burn or if your start-up has been generating enough revenue, it may benefit you to get interns or entrepreneurial contractors instead of co-founders. While interns may need some time to learn in the job, they can also offer exciting ideas and help initiate certain processes.
Remember, looking for co-founders takes time
Understand that having co-founders is akin to being in a marriage. It’s a long-term commitment. As such, you need to take time to find the most suited person or you risk being stuck with someone you don’t have good chemistry with.
Join Ramen Club today to find the perfect online community that offers support as you grow your start-up or other initiatives.