Finding the Right Co-Founder: For your Startup and your Sanity
I learned the hard way that choosing the wrong co-founder doesn’t just affect your startup - it drains you emotionally. Here’s what I wish I knew sooner.
Introduction
Choosing the right co-founder(s) is crucial - not just for your startup’s success, but also for your own sanity and growth. Through this post I want to give some practical tips on how you can structure your co-founder search, and learn from the missteps I’ve personally made or seen others make in the process.
There’s a lot of material out there by some brilliant people about the importance of having a co-founder that complements your skillset. I foolishly ignored that advice in my early startup days and tried to do it alone. I can’t stress enough the importance of having an equally invested business partner(s) to not only complement your skills but also to be your support mechanism when the business world seems insurmountable (which it will at some point). However, that’s not what this post is about.
A Simple Yet Effective Search Method
My Initial Attempts
I began my journey as a bootstrapped startup founder. When I eventually started looking for co-founders, I met a few folks who were keen to come onboard. I worked with three smart people over one year, but things didn’t work out. Several lessons stood out after this experience. I learned that I did not fully understand their motivation to join as co-founders. I realized late that their reasons ranged between wanting to experience the glamour of VC funding, expecting a stable salary from day-one, and not willing to let go of their full-time job before raising funds. All these reasons may seem valid, but unfortunately for me, they didn’t work.
Now I was again out there looking for a co-founder. I reached out within my limited network but didn’t find much success in finding people interested in starting up in the same domain as me. I tried a few co-founder matching networks, but my conversations there didn’t turn into anything concrete. What worked for me was LinkedIn.
Turning to LinkedIn
One fine day after getting tired of cold outreach and founder matching communities, I put out two job posts on LinkedIn for Co-Founders, one in India and one in the US. I was pretty upfront that being a co-founder is not considered employment, and the skills and qualities I sought in my co-founder. To my utter surprise, I had more than 500 people apply to those two job posts.
Filtering Candidates Through Videos
I obviously didn’t know whether the applicants had really thought it through before applying. In response, I recorded a 5-minute video of myself talking about the idea, my motivation, and that I’m open to brainstorming new approaches, which I sent to all applicants. I also asked the applicants to record a similar video of themselves talking about their backgrounds and why they were interested. This quickly filtered candidates based on motivation and commitment. After that point, only around 30 people responded. Not that I was shocked, but it allowed me to focus on having serious conversations with people who at least had more than an iota of conviction in starting up. I invited them all for introductory 30-to-60-minute calls and had many interesting conversations.
Structured Discussions
By this time, I had been hurt multiple times by my unpreparedness to onboard a co-founder. And this time I didn’t want to have the regrets of onboarding another co-founder who was not a fit for me. Over time, I had been building my process for how to find a co-founder. I had a set of questions with me which I felt would help me answer my search. During this period I came across Gloria Lin’s post on First Round’s website titled “The Founder Dating Playbook”. I could see how my questions, apart from the intricacies of my startup ideas, had significant overlap with Gloria’s list of questions. I highly encourage founders to use her process because it is practical and logically sound. Her approach gave structure to my scattered ideas. Her questions go beyond surface-level fit and force honest, uncomfortable conversations early on.
To all the people I had shortlisted, I sent them her post, invited them for a detailed conversation over the questions, and asked them to come with their questions. And after many gruelling and enlightening discussions, I found two wonderful and highly-talented people who I brought on as co-founders - Sachin Agrawal and Rakesh Negi. This open communication was key in understanding each other’s perspectives and motivations. Although our startup’s fate was not glorious, every day working with my co-founders was a journey of growth, and we faced our challenges with maturity.
Why Compatibility is Crucial
Compatibility isn’t just about complementary skills - it’s about aligned core values and visions. Be very particular about your inner values and things that are unacceptable to you as a person and in business. Your values could be honesty, transparency, integrity, professionalism, striving for excellence, or anything else that matters to you.
Make sure to discuss the idea and vision in great detail. I have fully embraced the fact that ideas are dime a dozen and the beauty of startups lies in execution and distribution. Address each other’s doubts upfront. If you don’t have answers, note them down and leave it for another discussion, but don’t forget to discuss those doubts again. By the end of your conversations, you must be certain that potential co-founders are ready to dedicate a significant part of their lives to your startup. Startups require a leap of faith backed by market data and customer research. Like steel, you must have a strong conviction in your idea, yet be malleable on the path ahead of you.
I invited many of the co-founder candidates to attend customer meetings with me. It was indeed a great experience to see people testing our hypothesis in real time. At the same time, we got to see each other in action as co-founders working together to understand the problem we set out to solve.
Key Questions for Co-Founder Alignment
From Gloria’s list of 50 questions and my own, I came to realize that some questions revealed more about the personality of my potential co-founders compared to others. And I have highlighted them below.
1. Handling conflicts and challenging interpersonal situations
Ensure your co-founders can handle disagreements maturely.
Conflicts between co-founders are inevitable. It is up to you to let them be constructive or destructive. It is essential to understand how you would handle conflict. Do you always want to come out on top, or are you ok with solving the problem even at the cost of your ego, or can you avoid ego coming in between you guys in any situation? You don’t want to be in a co-founder relationship where you feel constantly berated or don’t have your concerns addressed. It will eat you up from the inside and you will start resenting your co-founder. It’s unhealthy for you as an individual and will not be good for your startup. Try to gauge this in your initial conversations.
2. Planning for divergence in vision and amicable separations
Prepare for potential divergence early.
Founders can have their visions diverge, or maybe you won’t align on how you want to run the business, or something could entirely break the possibility of you working together. That’s why discussing this is important. Maybe one of the co-founders would not wish to continue at that point, but that should not jeopardize the entire company. You would have customers, employees, and investors who trusted you. I hope it never happens to anyone in their startup, but as co-founders you should discuss how you would separate amicably without hurting your baby - your startup.
3. Long-term satisfaction with equity shares and employee stock options philosophy
Agree upfront on fair and motivating compensation.
Discuss the quantum of equity for each co-founder. Don’t be rigid or make unilateral decisions. It’s more of an art than a science. I’ve realized that equal equity splits are the best, fastest, and fairest. If you feel an unequal equity split will be justified, please be ready to explain why you think so. Discuss the equity vesting period in detail, and please have a vesting period in place from day one for all co-founders. Make sure you all agree on this. Startups are a business at the end of the day. No amount of passion for the idea will be able to sustain the co-founder relationship if the other person feels disvalued or swindled. Startups are a long journey, and unless you are super lucky, your startup will be in the trenches more often than not. You want to have co-founders who will always be your rock.
Discuss how you want to approach stock options for employees. Have a mindset of abundance and be generous with ESOPs since people who join you in your startup are signing up for a gruelling journey with you. People who decide to stick with you in tough times, value their effort. Have a reasonably long exercise period after employee exit (preferably indefinite). My personal opinion is that if you can’t value the efforts of your early-stage employees, then you could be a great businessman, but not such a good human being. It’s entirely your call, but be prepared to see shortsighted stock option plans negatively impact your organization’s culture.
4. Open communication and transparency
Be clear about your values and boundaries.
Every founder says they value open communication and transparency in their company until it’s their ass on the line. Few live up to their words. It could be decisions about hiring, finance, fundraising, technology limitations, etc. If you ever fall into a bad situation, will you be willing to be transparent? It goes back to the conflict question: if you’re in a conflict with your co-founder over a mistake they made, would you be willing to be transparent about a mistake you made? If at any point things go haywire and you start resenting your co-founder, how will the two of you address the situation transparently? Discuss it and try to put measures in place for it.
5. Financial expectations and the concept of skin in the game
Be aligned financially from day one.
Once you are out of the initial customer discovery phase and enter active development, every founder has to be full-time in their roles, apart from some exceptional situations (which I’m unable to imagine). If you’re not funded from day zero, will all co-founders be willing to invest money into the company? Maybe not everyone will be financially ready to do it, but even let’s say 50% or 30% of what your other co-founders are investing? Bring skin in the game. Discuss when you would start drawing salaries, how soon you want to start generating revenue, and your fundraising approach. Openly discuss everyone’s financial expectations. People have responsibilities at home, and if you don’t have a frank discussion in the beginning, it could create bigger problems later. Let’s say the startup faces some tough financial times, and the salary stops coming on time, the tension at home will definitely spill over to the startup.
6. Business philosophy on spending and allocating money
Clarify attitudes toward company spending explicitly.
This question is not there specifically in Gloria’s list of questions, so I thought I’d put it explicitly. I have realized that you must clearly understand how frugal or extravagant your co-founders are with company funds. Maybe only one of you will be involved in day-to-day disbursal of funds. While chasing the top of the funnel metrics, founders can tend to overspend on discounts, marketing, sales, events, hiring, consultants, offices, tooling, etc. Be aligned on how you make financial decisions and tradeoffs. You don’t want to be in a situation where your co-founder comes and tells you, without warning, that you have only a month of runway left. In the early days, have a financial plan in place, and all founders should be involved in all financial decisions that can reduce your runway by anything more than 2 weeks. Your comfort level can be something else, but discuss it out. Put this clause in the co-founder agreement about how you will handle finances.
Conclusion
Finding the right co-founder is challenging but worth every ounce of effort. In the above post, I speak from my own professional experience. I have made mistakes and have been at the receiving end many times. When looking for a co-founder, don’t rush into making a decision. Take your time, trust your instincts. Have tough, open and vulnerable conversations upfront. Put yourself in the other person’s shoes, try to see things from their perspective, and be ready to address difficult and uncomfortable questions. Ensure you are convinced you would like to work for the next 10 years with this person you plan to onboard as co-founder. The right partnership can transform your startup journey - and your life.
Talk to Me
In the spirit of gratitude, I have opened up four 30-minute slots each week for anyone who might want to discuss or brainstorm ideas. Whether you need to talk about ideation, product management, development, growth, business development, or customer success - feel free to book my calendar. I hope, in some small way, I can pay forward the generosity that has been shown to me. Here’s the link to my calendar (click here), which you can find on my LinkedIn profile as well.