Finding a Founder, Partner and Co-Conspirator

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Finding a Founder, Partner and Co-Conspirator


If you are the founder of a software startup, when is it time to bring on your first co-founder/partner/employee/co-conspirator?


There comes a day when an opportunity presents itself to help spread some of the work and bring in a co-founder/partner/employee/co-conspirator.  The first time you go through this, things can be both very exciting and very frustrating.  On the one hand, there is the excitement and gratification of sharing.  There is a very basic human need to share our success (which has the effect of amplifying one’s joys of achievement).  We like to show others how smart and capable we are, and this is near-impossible without having someone intimately aware of what makes us tick and seeing things from the inside.  Though friends, family and significant others can play a supportive role, this is often short of completely gratifying because they don’t truly appreciate exactly how brilliant you truly are.  J  On the other hand, there is also frustration because the co-founder/partner doesn’t quite “get it” completely.  He or she doesn’t write code as well as you do, doesn’t understand the problem as well as you do, etc.  And, as fate would have it, in retrospect, there are often mixed results when bringing in that early co-founder/partner/employee.


Note that my comments below are focused primarily on bootstrapped software startups, and likely more applicable to first-time entrepreneurs.  If you have done this before, or are raising some meaningful outside capital, things change.


So, here are some considerations when trying to make this difficult decision:


  • Immediate Value:  The best partners that you will bring on are contributing value from day one.  Despite learning curves, lack of knowledge of the company, lack of knowledge of existing products, etc.  the best partners will likely be able to bring you some value from the moment they start.  If, within the first week, they are not creating measurable value (improving the product, deepening relationships with customers, increasing the hours that you get to sleep soundly etc.) then there is something that is likely wrong.


  • Find Exceptional Generalists (like you):  We tend to like people like ourselves – for a reason.  Though there is great power in supplementary skills (i.e. bringing on someone that is good at marketing, if you aren’t), it is often difficult to allow these kinds of people to help you if you don’t have some baseline of trust.  For many software startup founders, this trust is created when you can see some core set of technical skills and an ability to improve the product.  You’re looking for gifted generalists that can help you with any number of things.  These kinds of people often have an innate intellectual curiosity too (so part of the value they get from joining you is to learn new things).  Please refrain from posing the argument that not all people can be good at both creating the software and marketing/selling/finance/operations etc.  You’re right, not all people can be good at these things.  But, in early, bootstrapped software companies, generalists that are “well above average” in many things likely fair better than specialists.  In essence, startup founders are looking, to some degree, for clones of themselves.  In reality, if they could find a way to increase the hours in their day, they’d do it all themselves.  But, they can’t, so they decide to bring in outside help.


Summary:  What you’re really trying to do is team up with the next Joel Spolsky or Eric Sink.


  • Try before you buy:  This is in the interests of both parties.  Before you hand someone (regardless of how wonderful they may seem), a big chunk of equity in the company expecting them to do miracles, its best to let them jump in and do their thing.  Often, whether someone works out or not is an issue of chemistry, skill, stage of life and myriad other factors.  The only way to know whether someone will actually be able to help you and share your passion is to let them demonstrate it.  Thankfully, this is a two-way-street.  Its also in that person’s interest to see if they like working with you, can contribute value and generally like where you are headed before they get too deeply involved.  If someone pushes you too hard, too early to be a “partner” in the company and receive equity, take pause.  The right person wants to have skin in the game, but only after they have figured out it’s a game they want to be involved with in the first place. 


The good news here is that you can often use role-reversal and empathy as an effective tool.  Put yourself in their shoes.  If it were you, what kind of concerns would you have?  What would you want to know?  What type of “respectful escape plan” would you be looking for before jumping in?  If the person you’re looking for isn’t manifesting a similar set of questions/concerns/passions, etc. that you would have if you were in their place, its likely its not a good fit.


There comes a time in when you can use the help and you’ll be missing out on opportunity by stubbornly holding onto the reigns too tightly for too long.  Learn to find, attract and retain great people.  It can be a lot of fun and very gratifying.  And, its really, really hard to build an exceptionally successful software company by yourself.  Given my reclusive and idiosyncratic nature, if there were a way to build software companies by locking myself up in a room and not having to deal with people, I’d be doing it.  But, there isn’t, so I don’t.   J




Posted by on Thu, Mar 02, 2006


Thanks for sharing this nice article :)

posted on Thursday, March 16, 2006 at 1:34 AM by Firoz

Dharmesh... Thanks for writing this blog. t is hard to find thoughtful tips for software start-up entrepreneurs...

Guy Kawasaki 's The Art Of The Start, is certainly one of the best sources in the start-up field; but he doesn't cover to all relevant issues. So far you are covering interesting/untouched issues, and I was honestly impressed with our articles:
- Game Theory and Software Startups: Part II
- The Risks Of The Mega-Market
- Lake Wobegon effect
- Finding a Founder, Partner and Co-Conspirator

For instance I am an entrepreneur that has just left "the cave" (years of independent R&D), "armed" with a patent application at hand, which are looking for co-Founders, Partners and Co-Conspirators...

My initial plan was to talk to angels right after the patent app. to get the seed capital required to build a team and a functioning prototype. However with this tsunami of web2.0/mash-ups start-ups, it seems that a functioning prototype are a pre-condition to start any conversation with angels. So I started to look for co-founders/team members to develop the functioning prototype of the shopping path tools.

I have 2 questions:

1- How much equity is fair (or "average" at software industry) to offer co-founders and the start-up team ?
It is very easy to spread 100% (equity). Each 1% shared equity counts, at this very beginning stage; assuming a soon-to-come angel's bite, and later VC's even-bigger-bite.

2- I am right that at this market stage (2006), does entrepreneurs must have a functioning prototype to show it to angels? Or animated (flash) demos are "good-enough" as a proof of concept?
My issue: I was able to create a good-demo (in flash) that shows the GUI and business method of the tools, but I am not able to develop a functioning prototype (code it).
The conundrum: In order the get a good functioning prototype one must have good developers (a least 2), but it seems that in order to get seed capital one must have a good functioning prototype.
Truth: The developed technology is a candidate to become a future Standard graphical platform; I mean, the Demand and Supply Map/Shopping Path model&tools really presents a new paradigm/concept, and certainly will shake the status quo of current list-only shopping and marketing services. However only an excellent execution of its software/tools development (one that really influences shopping and marketing decision-making) would position its model as a standard graphical platform.



posted on Wednesday, March 22, 2006 at 3:47 PM by Guilherme Leal

Regarding my first question, I've just found a very good article:


posted on Wednesday, March 22, 2006 at 9:25 PM by Guilherme Leal

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