A TechCrunch article published in 2016 argued that startups that have more than one founder aren’t necessarily more successful. The author pointed out that at the time of writing, 52.3% of startups that exited (were acquired or IPO’d) had only one founder. This analysis flew in the face of conventional wisdom: that teams needed two or three co-founders to make it. While I don’t dispute the findings, I do think that summary statistics miss a number of nuances that are critical when deciding whether or not to bring on a co-founder. In this article, we’ll dive deeper into the dynamics that are likely to drive this decision.
It’s quite common that I meet founders that are seeking capital for their startup idea. I love talking to these founders, but I inevitably tell them the same thing: It’s exceedingly rare, these days, to raise capital for just an idea but not impossible. Moreover, there are ways that founders could finance initial product development without equity-based investment.
Seed funding was meant to enable innovators to build and prove out their solution in the marketplace, but with the increasing size of seed rounds (often $1.5M or more), investor’s expectations have also swelled. What was an exceedingly difficult task in the past has only gotten more challenging, and startup founders need to work harder to distinguish their business from a multitude of other promising companies.
I had the pleasure to attended a great panel discussion put on by Strawberry Creek Ventures and Castor Ventures, firms that invest in Berkeley and MIT alumni respectively. The two panelists were both fantastic entrepreneurs working on genuinely world-changing solutions, and over the course of the evening, they recounted their entrepreneurial journey. After the moderator finished asking her questions, the discussion was opened up to audience questions.
I asked the two entrepreneurs how they got their ideas off the ground at the earliest stages of their enterprise. This is a topic that I’m obsessed with given that it’s my job to help entrepreneurs launch their startups. Both answers were great, but one truly resonated with me.
The other day I met a very charismatic, intelligent, and driven young man at a venture capital summit in Silicon Valley. He had a compelling vision for an app that both solved a pressing social problem and had great commercial promise. He floated around the room striking up conversations with one person after another, and out of the hundreds of people that were there, he out-hustled all of them, by a long-shot. I had a chance to catch up with him briefly at the end of the summit asking him how meeting investors was going. He looked up at me, exhausted and simply replied, “It’s been better.”