What’s The Right Number Of Co-founders?
The most successful startup I’m currently involved with is now worth $1.5 billion. They’re raising another $300 million as we speak, and they’ll likely be worth around $4 billion when the round closes. The company had one founder, “Ray.”
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The most successful company I’ve ever been in involved with was Maxim Integrated Products. I worked at Maxim for eleven years, and I helped the company grow to over $2 billion per year in revenue with a market cap of over $20 billion. Maxim had ten, that’s right ten, co-founders.
You should pick the number of co-founders that right for your situation.
Two successful companies with two very different sets of co-founders. Ray actually wanted to bring on a co-founder, but the prospective co-founder was unwilling to take the risk of joining before Ray closed his initial funding.
True to his word, the prospective co-founder became the first employee Ray hired once he closed his funding.
In Maxim’s case, Jack Gifford, Maxim’s founding CEO, had his team lined up, so he brought them all on, en masse, instead of waiting. It was the right approach for them because they could hit the ground running.
However, you shouldn’t delay bringing on a co-founder because you’re worried about dilution.
When I started my company, I ended up with four co-founders. My thought process was really simple.
If I could find someone really good and bring them on as a co-founder, it would make us even stronger. And indeed it did. Each co-founder we added made us stronger in the eyes of our investors.
Your co-founders set the stage for everything that follows, so choose wisely.
The talent level you and your co-founders set at the start, and the culture you and your co-founders set at the start will influence everything for years to come.
For example, if your co-founders are mediocre, it’s very unlikely you’re going to hire an outstanding team. Think about it. Why is an outstanding engineer going to work for a mediocre co-founder?
The answer is they wont.
Don’t be afraid to bring on a late co-founder.
The last co-founder to join the team was “Randy.” He was the final piece of the puzzle to get us over the top with investors.
Not only did Randy have a wealth of experience, Randy introduced me to our only angel investor, Bob Dobkin. Dobkin was the co-founder of Linear Technology, one the most successful companies ever in our space.
Dobkin’s credibility was another additional factor that helped close our funding.
Don’t be afraid to fire one of your co-founders if they’re not working out.
Remember that over 50% of all founder relationships don’t work out. That’s what happened with Randy.
Despite all his skill and ability, Randy was a bull in a china shop. He just couldn’t get along with anybody, so I had to fire him.
You get in trouble when you don’t take action on an underperforming employee or founder. Then you run the risk of losing more members of your team.
When I told my investors that I was going to fire Randy, no one objected. They all supported my decision.
That’s as it should be. It’s your company, and the employees, including your co-founders, work for you.