Are You A Solo Entrepreneur At Heart Or Do You Long For A Co-founder To Share The Risk And Journey? Here Are The Pro’s For Each Alternative
If you have hopes of becoming an entrepreneur and have a solution to a big problem, what is your next step? Should you go it alone or find a co-founder? For me, I knew I wanted to run with a strong pack to move smarter and faster and the five of us did just that creating a billion-dollar company in just six years.
Before you examine the pros and cons of going it alone or with a co-founder, you need to really understand your propensity for risk. Are you the kind of person that can wing it alone or do you need the security of a teammate? It’s not about how smart you are or your individual capabilities. It’s really about your comfort level with risk. While this article cannot help you with your “risk” quotient, you can review the pros and pros of going it alone or teaming up with co-founders in creating your startup.
Pros of a Co-Founder
Startups are hard. In the early days of a startup, it’s easy to get excited while you are discussing the startup with family and friends. But once you really start, the reality is that you are facing an uphill climb. The amount of work you have to do will be more than when you were working for someone else. Sharing that workload will make the hard days easier and the good days great.
Share the stress. As a result of the enormous amount of work that is required to launch a new startup, lots of stress will inevitably come. And you should not take it home with you. Your significant other and/or children aren’t going to understand what you’re going through and no, you can’t vent to your employees, they’re not your friends. But your co-founder is there which allows you to share the stress with someone that you’re working with every day.
Solving problems. You know that problems are going to come up no matter how well you plan. The issue is that you’re going to need the perspective of another person that understands your business like you do, and that person can only be a co-founder. You can’t really look at problems from just one point of view. It’s equally as important that you have an opposing view. Together, you will be better problem solvers.
Share the costs. Starting a business can be expensive and fundraising early and without a product or prototype is really difficult. The opportunity to work with a co-founder will allow you to split the initial costs of getting a working product or prototype going, which will in turn allow you to raise funds at a better valuation.
Mitigate risk for investors. Investors may be concerned about a single founder depending on the potential path of the startup. If you were to get sick or disabled, what would happen to the company? Most investors will say they like to invest in a great team they trust. If you are a single founder, they can still trust you as over 40% of funded startups have only one founder. However, they will feel less risk with co-founders who can showcase the synergy and strengths of a great team.
Pros of a Single Founder
You can move faster. When you’re able to make a decision without consulting others, you can do it quickly and move on with make that decision a reality. If you have a co-founder, it will involve a bit more discussion and coming to a mutual agreement. That could take a bit more time and effort.
Less Drama. There are countless stories of co-founders butting heads and fighting over all the decisions. Egos can get out of control quickly. Co-founders can disagree strongly on where to take the company long term. Many times that ends with a less-than-amicable split that puts the company at risk. While potentially lonely, a single founder will not have to deal with a partner’s ego or mood swings.
One Vision. When you’ve only got one person leading the company, it’s clearer where it’s heading and who’s in charge. When a company lacks clear direction, it’s much harder for everyone on the team to know what to focus on. What could be worse, is co-founders who don’t quite agree on the company vision and that will disrupt the company.
Personal Style. This is not about the cloths you wear. It’s about how you roll. Whatever your style is, you get to keep doing it. You make the rules, the hours, the whatever. Its just you. This more easily allows you to establish the values and the culture of the startup.
Your Equity. The startup is 100% yours. You get to personally debate the whole “all of a grape vs a slice of a watermelon” regarding your strategy to raise money or bootstrap and the potential outcomes. The decision making on who to give equity to and for how much is all yours.
As you can see, there are potential advantages of being a single founder or working with co-founders. It comes down to your risk factor and your personal style.