A critical component of success for companies is having a solid co-founding team. In reality, one of the main reasons why businesses fail is not choosing the right founding team.
An idea will remain just that—an idea—without a solid team behind it. Finding the ideal co-founder, though, can seem like a protracted and challenging task. Entrepreneurs must take several factors into account when choosing who to start a firm with, from what to look for in terms of skill sets, compatibility, and personality, to where to meet potential co-founders, to make sure it will survive in the long run.
Why choose a co-founder?
A startup’s chances of success are greatly increased when there are two founders on the team as opposed to only one. Two founders with a complete commitment make a stronger whole.
In general, two heads are preferable to one. The ideal co-founder may be a great friend you can lean on during difficult times or someone you can bounce ideas off of. They might be someone who shares your values or has similar interests. They can also be someone who has the necessary business acumen and experience to assist you in locating investors.
Finding the ideal co-founder, however, is essential when starting a business with someone else. One of the most frequent causes of business failure, particularly in the early years, is having the incorrect founding team. Approximately one in five firms fail because they had the wrong team (14%) or because there was discord between the team and investors (7%).
Things to keep in mind while choosing your co-founder:
- Find a partner who understands your demands for a work-life balance.
- A co-founder differs from a coworker or employee in several ways. Therefore, when selecting a co-founder, go for someone dependable, self-reliant, and can manage the company almost without your intervention.
- Work with someone you’ve known for a while or have already worked with. This way, conversations will flow more swiftly and reliable cooperation will be achievable. A long-term partnership can assist you in accelerating the close collaboration learning curve, which might occasionally take years to create.
- There will be undesired moments, events, transactions, quarters, etc. There will be difficult days ahead of you, even if you are a passionate and persistent person. Therefore, having a co-founder who can help you through difficult times is crucial.
- Finding co-founders with complementary skill sets and different specialties is essential for dividing the workload and allocating resources.
- Even when it’s difficult to say or hear, you and your spouse must be dedicated to always telling each other the truth. Both effort and patience are needed for this. You shouldn’t choose a co-founder who is wary of giving you the opinion you need.
- Your co-founder should share your mindset and have the same vision as yours for the company you are founding. Your partner’s primary reasons for joining your enterprise must include a passion for the venture you are undertaking.
The Co-Founders Agreement
Having a Founders’ Agreement that formalizes their working relationship is one of the most important things co-founders of a startup should undertake.
Even for businesses that have only recently launched. Many firms have failed due to co-founder disagreements; however, a well-written founders’ agreement can be very helpful in resolving disputes amicably. Because the agreement offers them options for dealing with their current predicament, the parties can frequently come to a resolution.
A founder’s agreement formalizes and makes legally obligatory the understanding between the co-founders regarding the obligations and operations of the business.
Forming such an agreement necessitates an open dialogue about perspectives, goals, worries, and startup arrangements.
Lastly, even while the agreement may mention things like duties and responsibilities, non-disclosure, the departure of the co-founders, termination, etc., you should be aware that none of these clauses is typical for any kind of organization. It’s crucial to have a customized agreement for your company that addresses all of the potential conflict-causing factors in detail rather than in general terms. It ought to be thorough but not challenging. By doing this, the likelihood of crippling surprises when the company’s co-founder ties are operational is reduced.
The founders’ duties, rights, and responsibilities are outlined in this agreement. In addition to allowing co-founders to establish a shared vision, it also offers a mechanism for resolving potential future disputes. As a result, the creation of it shouldn’t be hurried and lengthy ongoing talks are needed to write down the provisions. Prior to the company becoming overly large, it is advantageous to have the team’s expectations in line.
Conflicts may still occur despite taking into account all of the aforementioned factors because of the unpredictability of the business environment. Provisions in the founders’ agreement assist create a procedure for handling unforeseen circumstances, safeguarding both your startup and your partnership.