You have a brilliant startup idea, you have professional expertise in the field, and you have the drive to succeed. Now you need to find a co-founder, and you have no idea where to begin.
Finding the right co-founder is arguably the most significant first step to your company’s success. Their victories will be your victories, their losses will be your losses, and you will rely on each other for your well-being, professionally, financially, and emotionally.
It is also well-documented that one of the leading causes of startup failure is the wrong team, so you can say finding the right partner for your venture is kind of a big deal.
As a Startup Psychologist in an early-stage Venture Capital firm who focuses on founder dynamics, I am at the apex of the co-founder crises that many companies go through during their journey and have guided countless startups through the co-founder search. Through years of experience, I have learned the ins and outs of how best to scout your startup soul mate.
Know What You Need
Before you begin sniffing around for a co-founder, understand what it is that you are looking for. For this you need to get to know yourself, your skills, and most importantly, your weaknesses. In other words- you must know yourself in order to accurately choose your founder.
We have the psychological tendency to look for the known, the secure, for it is the things we know that we can control. However, that perfect co-founder is meant to complete you and have the skills that you lack for a minimum viable product (MVP) to be possible, as soon as possible.
If you studied computer science for four years next to your buddy Jim, although you may be tempted to rope him in to your startup (he always had the best mid-class snacks after all) this would be a fiercely weak move. You already have a tech background, what you need for that MVP is someone to fill in those essential gaps, be it an expert in sales, operations, or whatever other vital skills you are lacking.
As Eran Ben-Shushan, the co-founder and CEO of the successful events platform, Bizzabo, says, “don’t double park on skills.”
Although you are looking for someone who is different to you in terms of what they do best, it is also important that you find someone who is similar to you in terms of values, life goals, mindset and whose company you enjoy. Chemistry is a core factor for success.
This is a person who you will be spending endless time with and bad blood between co-founders can kill a company before it has taken its first breath.
These seemingly contradictory pieces of advice are summarized perfectly by entrepreneur and venture capitalist, Peter Thiel:
“Everyone at your company should be different in the same way — a tribe of like-minded people fiercely devoted to the company’s mission.”
Put the Word Out
Founders often have an obsession with privacy and “stealth mode” lest someone steal their idea and run with it. While this fear is understandable, it is not entirely reasonable and can greatly harm your ability to find the right co-founder.
The chances of finding the perfect co-founders amongst your close circle of friends are not high, so putting yourself and your company out there to reach a wider audience is essential, be it through LinkedIn, Twitter, email, or sharing your news with family, friends and new acquaintances.
This does not mean you have to spell out your business thesis from start to finish, but giving general details of the space you are in and the role you are looking for is unlikely to result in competitors popping up left right and center. After all, it takes a very specific person to execute on an idea, and you are that person.
The Courting Period
Once you have put yourself and your startup on the radar, prospective partners will begin to turn to you. Of these prospects, there are three levels of connections- those that you know personally, those that you know through a mutual acquaintance, and those that you don’t know at all. The due diligence process will, of course, alter depending on the level.
The first step when it comes to a virtual stranger will be a courting period, much like going on first dates. This should be two to three times and should occur face to face, in different contexts. One of these meetings should take place at their or your home, the other at a bar or restaurant, and so on. This will help you assess their character in different conditions as you see the changes in the way they conduct themselves.
During these meetings, the more that you lay out on the table, the easier and healthier it will be for you and your company down the line. Topics to be brought up include roles, vision, lifestyle, and what you are looking for as you enter this endeavor (exit? M&A? IPO? ). You should assess where they are in life, are they ready to devote themselves fully to this project? Where do they put their energy?
On top of making sure that your values and vision align, it is also a great time to ensure the chemistry is there and whether you will be able to share an office with this individual without tearing your hair out when things get rough (and they will get rough.)
Time for Reference Calls
After initial conviction, if the courting period went smoothly and you think the person may be a good fit, then you will start reference calls. This can be a delicate situation and should be handled with grace and sensitivity. There is a big chance that your potential co-founder is still at his old job, so research the complete situation before you start picking up the phone and tentatively outing them to their current employer.
You can use social networks like Facebook or LinkedIn to find mutual acquaintances. Then start connecting and inquiring about your prospective co-founder without beating around the bush.
Suitable questions to ask include “how does xxx conduct themselves at work?”, “what are xxx strengths and weaknesses?”, “do you think they are suitable for a leadership position?”. Here you can get valuable insights that may have been hidden to you prior to the calls.
The Trial Begins
If you think you have reached the end of the road after your reference calls, think again. Settling on a co-founder is monumental. You would not choose your wife after three dates and a background check, the applies for choosing co-founders. At this point, if you are happy with the information you received via reference calls, it is time for a trial period.
During this trial period you should work with your potential co-founder side by side for as long a period as possible and start doing the initial heavy lifting together. This includes building business models, consulting advisors, and solving problems. This will allow you to experience what this potential co-founder is like as a partner in practice and will either prove beyond a doubt that they are the one or put you off.
However, to make this trial period as beneficial and productive as possible, there are a few boundaries to put in place. First and foremost, it is on you to ensure that they are fully aware that it is in fact a trial period and your official partnership has not yet begun. It is also vital to make it clear who will be leaving the trial period with the intellectual property gathered and go forward with the idea. For this, a simple term sheet/ agreement stating whose IP it is will be enough.
Lastly, you should encourage your potential partner to keep their job during the trial period and work together after hours and on weekends. This guarantees that if you decide not to progress, you have not taken away their income and it will be a far easier process to let them go.
If your potential co-founder has been through this entire process- they have the skills you lack for an MVP, your values align, the chemistry is there, references check out and you have practical experience working together for a month or more, then you can know with confidence that this is the co-founder for you.
While it may sound like a tedious process, especially when you are eager to start building the product of your dreams, finding that perfect partner will save you infinite problems along the road and can make the difference between yet another failed startup, and a billion-dollar business.
The investment is worth it!