The 7 Step Co-Founder Checklist
By Alice Bentinck, EF Co-Founder
Finding a co-founder isn’t about going through a checklist. Unfortunately it doesn’t work that way and you can’t get one on Amazon. That said, I wanted to share some of the ways we think about co-founders at EF.
Committing to a co-founder seems to the sort of thing people throw themselves into relatively irrationally (“We just met, let’s cofound!), or shy away from it irrationally (“I haven’t known them for ten years, this will never work”).
This is why at EF, we select based on individual talent — even if you come to us in a team. When we’re assessing early stage startup teams, we want to understand the value that each co-founder brings to the table and to understand the team dynamics.
It’s not a checklist, but here’s a rough guide of the things we look for at EF when we’re building and selecting early stage teams:
1) Both co-founders are technical, or technical with a domain expert
At EF, we are happy to support teams that have overlapping technical skills. This often means you can build faster, but more importantly, we find that it means the co-founders challenge each other technically and come up with more interesting products and solutions. We used to take about 30% non-tech on EF.
Interestingly, we found that co-founding teams with a non-tech co-founder developed ideas and solutions that discounted the technical person’s ability. On the other hand, we saw double technical co-founding teams challenging each other to build bigger and more sophisticated products.
If you do have someone non-technical on your team, we’re looking for them to be a domain expert. This means someone who has unique experience, skills or connections that makes your idea possible. For example, if you look at Adbrain (EF2011–12), Gareth Davies joined the team of technical co-founders with the experience and connections in the advertising industry that completely changed the quality of the product that they could build.
2) Both co-founders are involved in everything
We are strong believers that in the early days of a startup you don’t need a business person (where that is their only skill or contribution). We support our technical founders to learn the skills to be the ‘business person’, to do customer development, develop the business model and speak to investors.
This is important because if you’re building the product, you need to know intimately what your customers want — you can’t outsource this to the business guy. You also need to intimately understand how your startup finds customers and makes money. You’re the founder after all.
3) They aren’t ‘pity founding’
This is a hard one, but one that we see frequently. This is where we get very early stage teams who have known each other for a long time and are very good friends, but it’s clear that one of the co-founders is carrying the other.
This can be a strange situation where one of the co-founders may not be really into it, but feels they can’t leave due to friendship loyalty, or it may be that the highly skilled co-founder over values the other co-founders skills because they don’t have anyone else to found with.
We find one of two things happens with these teams, either they break up relatively quickly when they start actually working together, or one carries the other and the startup very slowly.
4) They understand the cost of co-founding with each other
A co-founder isn’t a ‘must-have’, a generic role that needs to be filled so that you feel you have a startup. A co-founder is a vital value-add that exponentially fast tracks the development of your startup, in the early days and in the future.
There is a cost to any co-founder. Sometimes that cost doesn’t feel real because it’s equity in something that barely exists. The real cost is the opportunity cost which means you won’t be able to give that equity to anyone else.
5) They’re happy to split 50:50
Every now and then we have teams who don’t want to split their early stage equity equally. Typically, we recommend a 50:50 split. Every now and then there might be a reason why this shouldn’t be the case, but this is rare. When we see teams who aren’t happy to split 50:50 it rings alarm bells as it often means that one co-founder isn’t seen as valuable as the other. If this is the case, should they really be a founder? Would they be better as first employee?
Remember, equity is forward looking, not backwards. It should recognise the future contribution everyone will make, not who came up with the idea.
6) They respect each other
Liking someone is not enough of a reason to co-found with them. What matters 10x more is respect for each other. We have had co-founders in the past who, when they started, might not have been each other’s first choice to hang out in the pub together, but they had deep and sincere respect for each others skills and abilities. The best relationships seem to work where both co-founders think that the other might be slightly better than them.
7) They’re both ready for the burden
We see early stage teams that seem to be functioning well in the early stages, they tick all the boxes above, but when it gets really tough (as it always does), they start having problems. They are many reasons why teams have problems, but one of the less talked about ones seems to be when one founder isn’t ready for the ‘burden’.
The burden is that feeling every founder has to learn to love, the knowledge that it’s all on them. I would imagine it’s what being a parent feels like. You can’t get out of your responsibility to the company, you have to embrace it. It’s pretty scary and it’s the point where you let the startup take over your life. When we see one co-founder working hard to solve the current challenge and one working out how to protect their work-life balance, it’s clear there’s a problem.