A VC's request for an extra 1. Biz on Biz Are two heads really better than one? Silicon Valley is made up of a lot of dynamic duos: Larry and Sergey. Jobs and Woz.
Hewlett and Packard. Now, Y Combinator now wants to help founders find their other half. This week, it launched its own co-founder matching site to help entrepreneurs partner up. Only four of YC's top startups came to the accelerator without a founder, Y Combinator discovered. But do founders really need a partner? Consciously coupling with another entrepreneur may not be a determinant of success.
I also spoke this week with Ali Tamaseb, a partner at DCVC who analyzed more than unicorn startups between and He ended up writing a book, " Super Founders ," based on 30, data points to try to bust some of the common myths about founders, like you have to be a college drop-out or be in your 20s. In the end, the number of co-founders doesn't matter, Tamaseb found.
So is it better to have a co-founder? Maybe if you're going through YC, but maybe not. How can cities get smarter without crushing city budgets, wasting money, or violating the privacy of citizens? Learn more. Meka Asonye joined First Round in March. A veteran of Stripe and Mixpanel, Asonye's seen all stages of a startup's sales growth. He invested early as an angel investor in Rimeto, Coda, Snackpass and Stytch.
What is the biggest issue that your partners are thinking and talking about at your Monday partner meeting? First Round still behaves like a startup and we are constantly working to figure out how to be the best partner to ambitious founders. Right now, we're seeing founding teams move through our process at an incredible clip. We're talking about how we can run a process that's quick and efficient yet still allows us to go deep on diligence.
Separately, we're thinking about how to continue to go earlier in the stack. We've been developing programs that help founders find co-founders and help them test their ideas with potential design partners and early customers.
Our hope is that these programs will help people from all backgrounds consider starting companies. I'm a huge aviation geek.
Often co-founders are friends, but is that the best way to select co-founders? I have seen many good friendships ruined after a startup venture goes south. Every business needs some technical skill and some business acumen. Co-founding teams should bring in complimentary, not overlapping, skills.
Should co-founders have the same equity stake? If you asked me this question before my first startup, I would have said why not? Now that I have launched some startups, I would say there is no reason to have co-founders have the same equity stake. Most co-founders decide on the equity structure in a very arbitrary way.
Let us say founder A and B both start at the same time with similar value-add. If they started at different times or brought different contributions, that should be adjusted accordingly. Can I fire a co-founder? A company is a separate entity from the founder, and that relationship becomes even more separate when outside money is raised. If one of the co-founders is not performing or is being disruptive or unethical, you should definitely consider getting rid of him or her.
However, never ever do this for wrong reasons, like depriving co-founders of their equity. So why is it that this notion has gained so much popularity and voice? Running a startup is hard, and the times when you doubt your approach, capability, grit and market potential come way too often. If there are two or three people at the top, statistics come into play.
The chances of all of them being down at the same time is relatively slim. I have been a solo founder. And when I launched my first startup, I was The problem was that even in those times, I had to keep my head in the game. I knew I did not have a lot of time to feel sorry for myself or wallow. I would feel down, get over it, and then I had to pick myself back up again.
That was the hard part. They were also much more likely to split the equity equally. Indeed, our research suggests that many founding teams care about displaying outwardly visible equality: not only does everyone gets the same equity share, everyone also gets exactly the same salary.
What do investors make of teams that split the equity equally? Our data suggest that they are less than thrilled. Even after statistically controlling for a lot of factors, our data still suggest the same basic message: companies that have equal splits have more difficulty raising outside finance, especially venture capital. Venture capitalists could obviously tell the founders to come up with a different equity split, but that causes a lot of strife and heightens cofounder turmoil and turnover.
Given that venture capitalists invest in less than one out of every hundred companies that come across their desk, they are looking for reasons to say no. Interestingly, our research suggests that equal splits are more a symptom than the cause of trouble.
It is not the equal split per se that turns off the investors, it is that equal splits are a symptom of bigger issues with the company. Vesting, in which each founder has to earn his or her equity stake by remaining involved in the startup or by achieving pre-defined milestones, is one way to achieve the dynamic approach advocated by Robin. Essentially, such agreements are the equivalent of a newly engaged couple grappling with adopting a pre-nuptial agreement.
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