A survey from The Startup Genome Project shows that solo founders take 3.6x longer on average to scale their business, and co-founder teams are 2.3x more likely to pivot successfully.
Another research paper from Harvard Business School’s finance unit reports that customer bases typically grow three times faster in businesses with two or more founders. Having a co-founder can help you find the missing piece of the puzzle that takes your business to new realms. It’s not always plain sailing, however, with partners often ending up having different visions for the future or arguing over equity. According to OnDeck, here are some of the pros and cons of having a co-founder in business today.
Pros
Increased confidence and support when starting a company
Starting a business from scratch is a nerve-wracking experience. Having a co-founder alongside you can boost your confidence while easing worries about failure. As Ubiquity Ventures founding partner, Sunil Nagaraj, states: “Starting a company is like jumping off a cliff; holding someone else’s hand helps.”
Diversifying skillsets makes your business better equipped to succeed
It’s unlikely you’ll be an expert across each element of your business from the get-go. By finding partners that have different strengths, you will be better placed to succeed. Chatdesk co-founder Aneto Okonkwo recalled: “Since we bring together tech and personalized human support, I knew if each person could own an area, it would ensure we would achieve our mission.”
Bouncing ideas off of one another
Many investors believe that businesses with more than one founder bring better ideas to the table through healthy collaboration. Ifty Nasir, the co-founder of Vestd, attributes finding the right partner as the recipe to success, “The baseline for most healthy co-founder relationships is respect, aligned values and a willingness to share the spoils. By building these elements into your co-founder hiring process, you’ll be future-proofing your relationship to the best of your abilities''
Cons
Too many cooks may spoil the broth
With multiple owners come multiple problems as decisions take longer, the business gets pulled in different directions, and ideas become diluted. This can be seen when raising capital, as startups with four or more co-founders receive an average of $ 910,000 less per investment round than those with two.
Co-founder conflict can bring down a business
The pressures of starting a business can take a toll on any relationship, but none more so than creating a strain between co-founders. Garry Tan, the founder of Initialized, advises: “Don’t agree on something? Don’t leave the room until you have a resolution. In these situations, there’s nothing more important than for you and your co-founders to do the work and come out of it stronger.”
Egos can cause tension when it comes to equity shares
Money can make people do crazy things, which certainly isn’t conducive to a prospering business environment. Zipcar co-founder Robin Chase recommends agreeing on how equity will be shared before getting started to avoid issues further down the road
