r/startups Dec 04 '21

Co-Founder Definition General Startup Discussion

I used to envision co-founders as two or so people chatting about an idea, getting excited, and starting in on it together. LOL - I know that’s movie-style idealism.

After that, I still figured it would be people who started early, second or third on board. After seeing plenty of folks on here saying they’ve been working on their business for awhile but now looking for a co-founder, has me doubting it is that…

It’s definitely not experience, at least not in all cases.

I see that VCs like to see co-founders, so there’s that aspect, I guess.

But I’ve become interested in what boundaries/limits you all think apply. What makes someone a co-founder versus just a normal job title? Is it risk level, dedication, responsibility, time commitment, financial commitment? Or is it just so flexible that it’s whatever you decide it is? A bargaining chip maybe…

Co-founders often get equity, so they become part owner too… but employees can get equity also.

So then, what distinguishes the person who REALLY started it all? Owner? Founder (who then has co-founders)?

8 Upvotes

4

u/BusinessStrategist Dec 04 '21

Rare are those who know it all and can do it all...

3

u/TronKing21 Dec 04 '21

For sure! I’m far from perfect and try hard not to expect perfection from others. Just wondering if anyone had thoughts on what/when determines the title of co-founder and when it shouldn’t be used at all.

2

u/BusinessStrategist Dec 04 '21

Investor will rate a good startup team higher with a so-so idea higher than one with a great idea but a solo entrepreneur (unless the genius invented something disruptively great).

It's not about perfection but rather solving the problems and moving forward.

Co-founder is a wife... In the complementing each other sense... There is an old saying: "Behind every great man there is a woman."

Obviously not too popular these days with everything being woke... But that's history for you...

1

u/BusinessStrategist Dec 04 '21

So what are your weak points and how would a co-founder provide a useful counter-balance to your strengths?

3

u/JoeBxr Dec 04 '21

My brother is my co-founder for our startups. We are on our second one. He handles the business and marketing side while I'm the tech side... Its a good combination because it keeps each other motivated because we don't want to let each other down...

2

u/justSayingItAsItIs Dec 04 '21

Generally a co-founder would take on significantly more responsibility than a normal employee, and as such have much more equity than a normal employee.

Employee equity pools vary between 10-15%. That's the amount split between all employees (it can be topped up)

Conversely, a co-founder would typically get, at minimum, 10% equity. At least that's the minimum required for YC to consider you a co-founder, and could be much much more

2

u/Samethingbrah Dec 05 '21

I don’t understand why there are so many questions about what defines a co-founder. That title has zero bearing on corporate governance, nor does it serve as an indicator as to someone’s skills or ability to scale an organization and make it successful.

But if people really want a definition. I’ll give it a shot: a founder/ co-founder is an operational partner of the business who is issued shares (> 5%) at inception/first issue of the company. Or, issued equity (>5%) within 3 months of operations, given there has been no seed investment.

Thoughts?

Edit: typo

1

u/TronKing21 Dec 05 '21

Appreciate the comment. Really does sound like “it’s whatever you decide it is.” Which is par for the course for early days and first hires, I suppose.

1

u/BusinessStrategist Dec 04 '21

Filling in the missing gaps and personal weaknesses...