Sheldon Whittle
February 27, 2023
We often get questions from people who are just starting out in their business about finding a partner to help them. It is good that they realize they need help, but it can be difficult to find someone who is good and will work well with them.
Some people think it is a good idea to hire a family member or close friend as their first co-founder. While this might work out sometimes, there is a big social and financial risk if it does not. This guide will help you understand what would make a good co-founder candidate, as well as some practical suggestions for how to recruit them.
If you already have someone in mind to be your co-founder, it is still a good idea to read this guide. It will help you think about what you need and what qualities to look for in a candidate. A co-founder is someone who joins a startup early on, often before the company starts making money. They usually don't get paid much, but they do usually get a piece of the company (equity).
The reason you want to start your own business is important. It can help you get a partner to help you. You will need to explain your idea many times. This is why it is worth taking the time to figure out a clear and simple way to say it.
Examples of vision statements:
The next step is to figure out what skills and expertise your startup needs. Heres how you can do that.
It is important to figure out which capabilities you need to focus on. Some of these might be best handled by a co-founder.
The last step in recognizing your business need is to use your business model to identify the activities and talent required to run your business. This will help you understand the roles and skills that your business needs.
For example, if you are making a business for consumers, then growth marketing, branding, and e-commerce will be important parts of your business model. But if you are making a business based on deep technology and science, you might need a co-founder who is good with money and has experience raising venture capital to help pay for the things you need to succeed.
After you understand your business needs, the next step is to understand what you like to do and what kind of work environment you excel in. Think about what kind of work makes you happy and what kind of work drains your energy.
Founders who want to be successful should invest in a recognized personality test. This will help them understand their strengths, what skills they are missing, and what their working style is. It also allows them to hire people who have the skills they are missing and decreases the risk of clashing personalities.
One way to decide what role you want to play and what your preferences are, is to think about people you have worked with or studied with in the past. There are two parts to this method.
1. Go through your resumé and for each job or school role, ask yourself:
After you've completed your list, take a moment to examine the trends in what you like.
2. Ask some of your old friends from work to help you understand what you did well, what made you happy and excited, and what you could improve on.
Some people may not be comfortable answering these questions. You might want to send an email before asking. Explain why you need to know, that their answers will be kept private, and how much you appreciate their help. Some people may need time to think about it before they answer.
After you have completed these steps, you will know what kind of work you like to do and what you are good at. You will also know what kind of workplace environment you prefer and the types of people you work well with and those who would make a good co-founder.
It is helpful to know what your business needs and what you are good at before you look for a co-founder. This way, you will know exactly what kind of person you need to help fill in the gaps. You should also think about what personality traits you would prefer in a co-founder before writing a profile description. This description should be no more than half a page long so that you can focus on the most important parts.
The profile should contain the following information:
All founders are learning on the job. This is because they need to know how to do many things. It is especially true for people who start companies and for technology officers who often need to learn new programming languages quickly. They must be able to learn fast. However, it is still expected that co-founders should have the skills to be productive from day one. So when you are looking for candidates, find people who have skills that will be immediately valuable and mission-critical.
When you are looking for a co-founder, it is important to find someone who is willing to be paid in equity. This is especially important if your venture does not yet have any revenue. Not all potential candidates are able or willing to do this, which makes recruiting a co-founder challenging.
How much equity they will receive is something that needs to be discussed and agreed upon. There are a few things that are taken into account when deciding how much equity to give someone. These things include time, control, and dilution.
Time: How long has the company been around? What does the company already have? If the company is new, could a co-founder get an equal share after working for a while and proving themselves? If the company has been around for a little longer, would you consider giving a co-founder an equal share if they were willing to put money into the business to make up for the work you have already done?
Control: Many entrepreneurs worry about giving up too much control of their company by giving shares to a co-founder. But remember, the co-founder will be worried about the same thing! You both will need to trust each other at some point and give up some control. Be aware that you will probably discuss this in more detail with a lawyer, but it will be expensive. Before meeting with your lawyer, it is a good idea to talk to other people who have started businesses and ask them how they solved these same problems. You should try to find a solution that is fair for both you and the other person.
Dilution:
Many founders worry about dilution, which is when they own less of a company because new people are given a share. It can be hard to decide how much of the company to give away, but when it comes to bringing on co-founders, it is clear that the focus is on making the company as successful as possible: new co-founders who have experience and skills that are important for the company's success may be the difference between success and failure.
If you are both trying to build something that needs money from investors, it will lead to further dilution. But this is okay because it is with the intention of growing a much bigger business.
If you want to achieve your goals with the help of others, you need to be prepared to give up some ownership of your company. This may mean that your share of the company will become smaller over time. However, this does not have to be a bad thing. For example, Dharmesh Shah is the co-founder and CTO of HubSpot. According to Forbes, Shah only owns 3.4% of HubSpot's shares. Even though his share is small, the value of HubSpot's shares has increased so much that Shah is still a billionaire.
Completing the previous steps means you now have the three main assets that will help you identify your co-founder:
All three pieces should be written down in one or two succinct paragraphs. Before you start your search in full, we would like to introduce you to a practical model for how to consider potential candidates: the Bullseye framework (a model in long use).
It is helpful to consider your co-founder profile when screening potential candidates. This is like a target, with the bull's eye being the ideal qualities you are looking for. The layers around the bull's eye represent candidates with some but not all of these qualities.
Sometimes, the person you want to work with may not be available. This means you will have a list of people who meet some but not all of the qualities in your profile. These people are in the second or third layer outside the bull's eye. That is okay. The other thing to think about is that the person you work with might bring something unexpected to the table, like connections to customers, talent, or investors. This could be essential as you think about the business going forward.
Remember that when you are hiring a co-founder, the great candidates always have options. They will be looking at you to see if this opportunity is a good fit for them. You should do the same thing when you are considering them for the job.
You should start looking for a co-founder in your network of friends, family, and acquaintances. You can think of it as a word-of-mouth marketing campaign.
Tell people you know who work at companies you like about your plans. Tell them you need help from a co-founder. Talk about your vision, what you're good at, and what kind of person you need as a co-founder. Tell them a story they will remember so they can tell other people about it too.
If someone you know offers to share your co-founder profile on social media or a relevant online forum, it may be worth it. This could result in a number of less-qualified candidates coming your way, but it is still a helpful way to get your name out there.
Before you start, it is a good idea to post your co-founder profile on your website. This has worked in the past to find candidates who are looking for employment. You will have to put in some time and effort to reach out and connect with people. Many times you will not get what you want, but if you keep trying, eventually you will find a co-founder.