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Building a strong co-founder team is all about looking at the road ahead. Startups can take years, even decades, to reach a point where they are fully operational, and a co-founder team with equal parts determination and skill is key to launching a thriving business.
The Org spoke with both early-stage founders and investors to get insight into that road ahead and discussed what makes a good co-founding team thrive, and how to find the perfect startup dream team.
Breadth Over Depth
Sam Natbony is a growth-stage investor at a private equity firm and the author of the tech newsletter Innovation Armory. He says there is no “cookie-cutter” approach to identifying successful co-founding teams, as they can come from different backgrounds and have many kinds of experiences.
He says that what he does seek out in co-founding teams comes from a breadth of experience working in different professional roles.
“I tend to look for three qualitative traits in founders,” Natbony says. “First, founders who have demonstrated personal and professional grit are most likely to persevere through the diverse set of challenges that an early-stage startup will inevitably face. Second, adaptability is critical because early-stage founders need to be able to wear multiple hats in different roles across their organization.
“Lastly, curiosity is very important. Successful founders have an insatiable passion for experimentation to learn as much knowledge as possible in an effort to solve a particular problem. They also aren't afraid to admit what they don't know and on the contrary, thrive in uncertain situations.”
Natbony adds that ideally, he likes to see at least one co-founder come from outside the industry with a “fresher and unique perspective,” but to also see at least one co-founder that understands the technical, historical, and regulatory nuances of a sector’s ecosystem.
Similarly, a strong co-founding team should be able to do 99% of all the work at a startup. For instance, if a company is specialized in wind turbines, one of the founders should know their wind turbines front and backward. This allows the team to grow their product from scratch and helps maintain control once investors and new hires get involved.
Know Who You Work Well With
Finding someone who checks off all these boxes can be a tall order. Natbony suggests looking within one’s own network to find someone to partner up with. Not only does the workplace provide insight on how someone works under pressure and stress, but it also helps you better understand their personality and work ethic.
Laura Tierney is the founder and CEO of The Social Institute, an EdTech startup based in North Carolina that empowers students to navigate social media in positive, high-character ways. She started her company in mid-2016 with her husband Colin Tierney, and a former colleague of hers, Maria Jankovics. Tierney recalls approaching Jankovics after observing her technical skills at a social media agency they both worked at.
“She and I were assigned to this project and she had to build a website really quickly,” Tierney says. “I showed up to the room, I hadn’t met her yet, and she presents this website that she built which was just incredible. And I was just like, who built that? Like, which of you built that? She could outcode any other developer I've ever met.”
When Tierney decided to make the leap to leave her job and pursue her passion project full time, she immediately knew who she worked best with, both professionally and personally. She brought on her husband as chief revenue officer, since he had experience working in startups and asked Jankovics to join as a co-founder and chief technical officer.
While flying solo as a founder at a startup is definitely possible, Natbony says he still prefers to see more than one founder in a team. “Especially in an early-stage startup, no one person can handle every function of the business alone,” Natbony says.
The most common and classic dynamic is two co-founders. One founder handles the more commercial side and oversees product vision as a CEO, and the other handles a more specialized side of the business such as a CTO. What is important is that the skills of each co-founder complement each other and not overlap too much to avoid tension.
In The Social Institute’s case, Tierney set up a triangle dynamic that she knows works well for her company.
“After founding the company, I brought on two co-founders who each started at different times," Tierney says. "The three of us work collaboratively, with the two co-founders elevating their thinking to me as the founder. My goal is to make sure that they feel empowered and trusted to act on their recommendations.”
But be wary. Jessica Millstone is the Managing Director at Copper Wire Ventures, an early-stage investment fund that prioritizes funding women-led startups in the EdTech space. Millstone has met with several founders in the year since she’s started Copper Wire Ventures and says that too many founders can signal trouble to investors.
“I’ve had three, even four co-founders come and pitch to me, and that to me is a little bit of a red flag,” Millstone says. “What's really the leadership at the company? Who's really in charge? Who's bottom-line making decisions?
Find Your North Star
Millstone says that what she really looks for in the earliest stages of a startup is the character of the founders themselves, and what they are looking to achieve.
“At the stage that we’re investing in, it’s really about the founder herself. Her drive, her commitment to the problem that she’s trying to solve or they, both as an individual or it is often a co-founding team we are investing in,” Millstone says.
Millstone also recommends finding a co-founder that shares the same vision for the company, both in product and in values, because when it comes to approaching investors, it’s important to be on the same page.
“Every time you take on an investor, you lose a piece of your control over your vision and tangible control,” Millstone says. “If you end up in a situation where you own very little of your company, you are completely at the mercy of the board, and you could be fired yourself. You could lose your whole company pretty quickly in a scenario that you're taking a lot of capital from outside investors.”
Having a co-founder that whole-heartedly shares the same goals for the company can provide a sturdy defense against outside influences taking control of the product and company.
No matter how many co-founders a startup has or how it is internally structured, both Millstone and Tierney agree that having a strong and trustworthy relationship with your co-founders will help elevate your business in an investor meeting. Outside of that, “confidence, passion, and knowing your numbers,” Tierney says. “That mixture creates just awesome energy in a pitch.”
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