Bringing new products to the startup market is already a challenging task: an entrepreneur needs to manage resources, secure investment, and, importantly, transform an idea into a functional product available to customers. One way to lighten this burden is by sharing it with someone else, whether that be an outsourcing partner providing app development services for startups like yours or a co-founder who once was your roommate. As the saying goes, two heads are better than one.

Even though we're not experts in psychotherapy, it's easy to understand that having someone share the same experience as you can be a great support. The greatest once-startups like Facebook and Apple wouldn't have existed if there were only a single startup founder without their co-founders. In this article, we'll focus on how to find a co-founder who will grow into a long-term partner, providing tips on how to recognize someone who matches your vision.

Where to find a co-founder?

Aquantances

The best way to find a co-founder is to start networking long before the project begins, which means being open to meeting new people and exploring what the world has to offer along your life path. It could be someone you knew from college and never considered working with until you had the idea for a startup. That's how Facebook was founded — by five people who were Harvard students and roommates.

Platforms vs events

There are several platforms offering to match you with a suitable co-founder; they usually focus on finding a technically skilled business partner. But how do you entrust something as critical as your precious startup idea to someone who's a complete stranger in terms of soft skills? The best way to check compatibility is to meet the person in real life and observe how they present themselves in direct communication. You might meet a promising potential co-founder in person by attending professional events, such as conferences.

When to involve a co-founder in a project?

The timing of involving a co-founder in your startup depends on the skills you possess as a founder. If you are skilled in building the type of products you're developing, you can involve a technical co-founder later on when you reach the limits of your expertise. However, if you're unsure about the technical solutions needed to bring your idea to life, it's worth collaborating with a skilled technical co-founder right from the start.

What to look for in a co-founder?

They handle stress well

It's beneficial if your co-founder is someone you've already experienced stressful situations with. This is important because simply knowing someone well doesn't guarantee successful co-founding in stressful situations.

They are long-term players

You need a team member who is committed to staying for the long haul. To assess this, evaluate their alignment with the company's long-term vision and values. While it's difficult to know immediately how long someone will remain with the startup, look for signs such as their determination to build strong relationships with team members and decision-making that emphasizes long-term profitability.

You share compatible working style

We're not implying that a difference in fashion means incompatibility — it's not about wearing ties versus turtlenecks. The focus of the startup founders should be on strategy. If you value a meticulous approach towards steady growth while your co-founder prefers rapid market capture through trial and error, that's a fundamental mismatch. It's advisable to discuss such topics beforehand.

They are ready to learn

While it's great to find a co-founder with the perfect skill set for the project, such candidates are rare. More importantly, you should look for someone who is willing to learn and is curious enough to explore the best possible solutions.

You have mutual respect for each other

It means that you do not underestimate each other's input. This is important, especially for co-founders with different responsibilities. For example, one might be the visionary or deal maker, while the other excels in technology or operations. At some point in a startup, a technical co-founder might start thinking that the visionary doesn't do anything apart from rambling, while the visionary might feel as if they are the only person who cares about the startup. If there is no mutual respect and understanding of the importance of each role, then there will be no partnership.

You don't question the leader's status

To avoid misunderstandings like those described above, the roles within a startup should be clearly defined and respected. There should always be one leader, usually the CEO, who has the final say in difficult decisions. If a critical situation arises with two opposing solutions, having a clear leader is crucial to making things work effectively.

They are open to discussion

Be cautious of individuals who agree with you at every point, as this may indicate they are holding back their true opinions. Accumulating disagreements can lead to major conflicts. It is much better to receive constructive criticism than to hear only praise, which may not be genuine.

How to evaluate a co-founder?

Now that you know what you need, the question is how to put it into practice. To determine if someone will be a good match as a co-founder, you might propose collaborating on a minimum viable product (MVP) together. If the collaboration proves to be successful, you can then move on to larger projects. It's also beneficial to discuss compatibility from the outset. Below are some key questions you might consider, and you're welcome to add your own:

Skills: How would you handle a challenge in an area where neither of us is particularly strong?

Values: What do you think should be our core values guiding our company?

Communication: How do you prefer to communicate, especially on sensitive topics?

Commitment: What is your preferred work-life balance, and how much time are you ready to commit to the startup?

Finances: What are your salary and equity expectations?

Adaptability: How do you prioritize tasks when all of them are urgent?

Culture fit: What is your ideal company culture?

Legal aspects of the co-founding

When co-founding a startup, handling the necessary paperwork is unavoidable. One of the initial decisions to make is the type of agreement you'll use: a co-founding agreement or a partnership agreement. Both involve collaborative relationships but differ in context and specifics.

Co-founding agreement

This type of agreement is specifically created for startup founders. Co-founding agreements should focus on aspects such as intellectual property ownership, vesting schedules, and methods for resolving disputes among founders. The agreement should also outline roles, responsibilities, decision-making processes, and equity distribution. Operating under such an agreement implies a high degree of involvement from all parties involved.

Partnership agreement

A partnership agreement covers any business relationship where two or more business partners agree to cooperate. It provides detailed information on aspects such as profit and loss sharing, the admission of new partners, management duties, and procedures for a partner's exit. Beyond startups, this agreement can also be used for general partnerships, limited partnerships, and joint ventures.

Equity distribution

There are documents that help regulate the ownership of equity: Articles of Incorporation and Shareholders' Agreements. Why do you need them? First of all, to have a clear understanding of each party's share in the company. Plus, if a co-founder leaves, you might want to buy back their shares to maintain control, and you'll need regulations to make it right. Let's look at the documents:

Articles of incorporation

This document explains what types of shares exist and how many can be issued. It's a way to legally document the creation of a company.

Shareholders' agreement

The agreement between shareholders can cover rules for buying back shares, who gets first dibs, and so on.

Intellectual property

Co-founders should decide beforehand who will own the Intellectual Property (IP) in case one of them decides to leave the company. Intellectual property includes inventions, designs, and brand names. It's important to be serious about IP from the start, as it could lead to bigger issues later on. A good example is the 2008 lawsuit between Facebook and ConnectU companies, which brought attention to IP boundaries in digital product creation.

Employment contract

If not mentioned in the co-founding agreement, the employment contract might cover details on what happens if a co-founder leaves the company, including IP, shares, notice, and compensation. However, this is a rare occurrence and is usually needed only if a co-founder agreement isn't in place.

Great examples of co-founding in the digital field

Google

One of the greatest examples of startups created by co-founders is Larry Page and Sergey Brin, who created Google. They met at Stanford University while studying computer science as PhD students. They had what we called the compatible skills: Larry was interested in digital libraries, while Sergey was an expert in algorithms and data mining. These allowed them to create the number one search engine with PageRank algorithm. Each brought unique perspectives and insights that were instrumental in Google's rapid growth.

Pinterest

Another great team is from Pinterest, where a combination of co-founder talents lead to a great product. Paul Sciarra was a great operator and dealt with strategic planning, Ben Silbermann learnt user experience from his time at Google, and Evan Sharp brought his expertise in design from experience at Facebook and architecture studies. An original idea and design background allowed them to create a social network combining search engines and strong emphasis on aesthetics.

Airbnb

The AirbnB creation derived from the a-ha moment when Joe Gebbia and Brian Chesky, being housemates, rented out air mattresses in their apartment to conference attendees who didn't get the hotel rooms. Nate Blecharczyk joined them later to turn the idea into a product. Thus, Chesky and Gebbia leveraged their design skills to create a user-friendly platform, while Blecharczyk contributed his technical expertise to build the infrastructure. The diverse skills of the team and their creativity allowed Airbnb to grow from a small startup into a hospitality giant.

An alternative to co-founding

One important reason to find a technical co-founder is that they possess a complementary skill set that you don't have. However, there's an alternative way to secure technical expertise for your startup: an outsourcing development company. How can this be a substitute for a co-founder? What are the differences and similarities?

With a software development company, you stay the sole owner of your product. With a co-founder, a fair share would often be 50/50. In contrast, with an outsourcing vendor, while you spend resources on product development services, there's no risk of losing ownership or dealing with legal issues if you decide to terminate the contract.

Involvement and commitment of a software company tend to be more transactional. There are two sides to this coin. A co-founder is usually involved at every level of the business, showing a long-term commitment. An outsourcing company, on the other hand, delivers a project within the scope of a contractual agreement, and the relationship is limited to that contract. Nonetheless, the contract allows for more flexibility in product development, and a software company is fully invested in meeting the agreements.

Partnering with an outsourcing development company gives you access to skills and expertise. While a co-founder brings personal skills and entrepreneurial insights, an outsourcing vendor offers access to a wide range of technical expertise and specialized resources. Even though a co-founder might be a valuable source of expertise in a certain industry, finding a vendor with relevant industry experience can provide a comparable amount of intellectual capital.

Resource allocation and investment differ greatly. With a co-founder, you share ups and downs, risks, and opportunities. Working with an outsourcing partner entails a straightforward financial investment. This means that with a software development company, you maintain control over strategic decisions. However, greater autonomy also comes with financial responsibilities.

But here's a tricky question: will an outsourcing company be as invested in the startup as you are? To foster a long-term relationship and emotional attachment to the project, it's important to start with them from scratch. However, reliable vendors always care about their projects, as their reputation is directly affected by them.

In conclusion

Finding a co-founder for your startup is a critical decision that can significantly impact the journey and success of your entrepreneurial endeavor. The right co-founder not only complements your skills but also shares your vision, dedication, and values.

Whether you choose to walk the co-founding path or work with an outsourcing vendor, building a successful startup demands a foundation of strong partnerships, a clear strategic vision, and a resilient approach to navigating challenges.

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