The foundation of a startup is critical. The founders are quite figuratively the foundation upon which a company is built over a period of years.
Jumping head first into co-founder relationship without ever making sure everyone is on the same page is frankly insanity. So question if you should even go to that founder dating event…
Startup sucks sometimes and it’s going to bring out the worst in one another. If you don’t know one another already this is akin to a mail order bride crossed with a ‘box of chocolates’- you have no idea what you are going to get, but it’s really hard to dispose of in a dumpster (Wow, things just got dark).
So always question, how well do you know each other? How well do you really know one another? Have you ever gone through a stressful situation together and did one take off their shirt and run down the street screaming?
Just because your co-founder is a long-time friend or family doesn’t mean that they have the same goals and opinions on what ‘normal’ is. You’ll make reasonable assumptions and realise your ‘normal’, taken for granted assumptions aren’t even their idea of normal. ‘What? I can’t use the company card to go to Vegas?‘ True story.
Regardless of the relationship, you want to get clear on the following questions, more or less.
I polled my Facebook and have added the key question various founders would ask.
Ability
- Respect: What are your key achievements? Do you think your cofounder is better than you? You want to believe they are awesome. A hire A. B creates a death dumb spiral
- Capabilities: What are you awesome at? You don’t want to have two cofounders who are basically CEOs (ie can’t market nor code).
Well I would ask who is Woz and who is Jobs? That way you know who is doing what.
Ronan Leonard, Irish Tech News
- Entrepreneurs?: At what age did you do your first entrepreneurial activity? Are you both actually founders, or entrepreneurial? Have you done stuff before? Startup is still perceived as cool. Most people are NOT founders, they are at best early staff
- Suckyness: What are your absolute weaknesses or things you hate to do? It’s best to be able to complement each other. You want to ‘hire’ a cofounder for strengths, not lack of weaknesses though
I was debating with myself whether it’d be..
- Are you willing to leave your current comfort zone to setup and run a company from scratch?
- Have you started a company or worked in a startup before?
- What roles would you be playing in the company? What do you like or dislike to do?
It’s definitely #2. I guess that defines the attitude & tells you a lot about the ability to find solutions to every problem
Christine, Liew, Co-Founder at Shoppertise
*Determination*
What was the toughest time of your life and how did you get through it?
Startup is going to hit hell lot of obstacles. I would definitely want to work with someone who don’t get demoralised easily. A cofounder has to share & believe in the same vision enough to be able to risk EVERYTHING for the sake of achieving success. Your co-founder must realize this job is more than a paycheck — in both the risk and the rewards that are available. I will make sure this quality is fully tested before bringing the cofounder in.
CK Yap, Co-Founder at Shoppertise
Attitude
- Work ethic. Do you work 100 hour weeks, or 40 hours? This will drive you insane if the other is ‘coasting’
- Trust: Do you actually trust me? Would you tell them about how you cheated your way through your MBA and be certain they would never tell anyone…? You need to know they have your back. Are you ride or die?
- Shady: Have you ever been bankrupt (and can’t be a Director again). Have you ever been convicted of a criminal offence? I know a startup where the VCs did real DD and found out the CTO was convicted of credit card fraud when they were 16…
How do you handle conflict?
How well do you take constructive criticism?
What are you like when you haven’t eaten or slept?
What do you want to own? What do you not care so much about? (Helps divide up priorities and responsibilities)Shira Abel, CEO, Hunter & Bard
- Conflicts: Are you on any boards that would create a conflict of interest? Do you have any non-competes? You don’t want to create problems you don’t need
- Honestly: What would you do in the ‘Prisoners Dilemma?’ Do you feel deep down that they won’t try screw you given the first opportunity? Think Mark and Eduardo. Also, do they steal? I’ve seen cofounders do all sorts of shady shit to steal investor funds and how they cover it up
- Handling stress: Have you failed at something before and how did you deal with it? You don’t want to deal with someone that is going to break down
- Location: Will you move to the Bay Area if you need to? Do you have to be based in London for some reason?
Tell me your favourite story/tale?
Jimmy Hanlon, CEO, Mobile Healthcare Networks
What is your favorite hobby?
Leonid Morozovski, Co-Founder at REGA
Aspiration
- Exit goal. Where do you see yourself in 5 or 10 years? Are you swinging for the fence with high likelihood of failure, or more modest in your goals?
- Exit?: Are you setting up to sell, or is this a lifestyle business to live off long-term? Both are fine, you just need to be aligned
- Sell out price: If someone made an offer in a year, what would you sell for? Is there a price you are both ok to ‘sell out’ at? Say $1m in the first year, $5m in year two? Or maybe if you get to $50m you’re out of there one way or the other!
- Press. [If not the CEO] How motivated are you by celebrity? Are you ok that as the CEO I’ll do the interviews? People can get weird and bitter about things and I’ve experienced arguments about press.
What’s your number? At what number do we sell ?
Juan Martitegui, Founder, Educatemia
How big is big enough! Aligning ambitions is key from day 1, so that the effort and energy is the same between whole company and especially co-founders.
Krishnan M Menon, Co-Founder Fabelio
Commitment
- Pay. Can you afford low pay or do you expect 6 figure salaries the moment you can? Money should be spent on growing the startup not having a comfortable life
- Piggy bank: How much have you saved? How many months can you go without cash in the bank? This really matters! Do you want to startup with someone who needs to pay rent next month and has no savings?
What would you do if we had to cut salaries to 0 for 6 months in the co-founding team?
Henric Suuronen, Co-Founder, Nonstop Games
- Full time: Are we both going full time on this, or are we going to keep the day jobs till you reach a certain point? Sure there have been startups (like Shoes of Prey) where one founder did the job and paid for the other founders to execute full time
- Family: What happens when someone gets married and does the kid thing…? What commitment is still expected? Don’t laugh. 10 years is a long time
- Commitment duration. Are you in for 3 years or 10+? This is like getting married to someone who only wants to date
- Test period. How long do you think it will take to figure out if this has legs? Are you going to ‘give it a go’ for 3 months and see how it goes, or do whatever it takes for as long as it takes?
- Missionary or mercenary: What gets you out of the bed in the morning? Are you doing this out of passion or avarice? It’s fine to want to just build a better mouse trap, but if one is all ‘change the world, hippy-dippy’ and the other just wants to make bank, you’re going to piss each other off eventually
If you had all the money in the world, would you still be doing this? Why?
Elvin Zhang, Investment Manager, Vertex Ventures
- Hiring and firing: Would you fire a friend as fast as you would hire them? You need to be logical and unemotional in startup. If you are driven, then you will be unbiased by emotion. It’s not terrible to be slightly sociopathic.
- Primary focus or side-hustle: Are you doing this 100% full time with no distraction? You will lose their mind if they start losing focus and doing side-hustles for ‘fun’
- Other shizzle: What if anything can we do on the side? Can we be mentors at accelerators? Can we do advisory roles of other startups? What is ok to do that is non YOUR startup
What motivates you to start a business? I find this a very powerful question to ask and allow us to identify what motivates them.
Gerald Ming, GrowthX
Decision making
- CEO: Who is the CEO? As the Highlander said, there can be only one (Read Who becomes Startup CEO among co founders?). You both have to be clear who makes the final call and be TOTALLY cool with that. I always ask this question to founders and expect a quick, decisive answer. ‘Um and looking at one another’ is not a good answer. This is always a conversation certain types try and put off having, but I recommend making it one of the first questions so things don’t get awkward
- Decisions: How will decisions get made? Is it dictatorial or collaborative? Where do you trust one another to just do things and when do you talk things out? As one well-known CEO in the Nordics said to me “This isn’t a democracy. It’s a dictatorship“
- When shit happens: What do we do when one of us needs to get fired? I’ve fired people before, it happens, it’s real. What do you leave with if you get fired (this is similar to the question about vesting, but address it again)
I’d ask them “what red flags do you see about ME“. Tests their observation skills and intuition, and also shows whether they will dare to raise concerns in tough situations rather than spare my feelings.
Plus, I may learn something new that others perceive about me. And even if I’ve heard the comments before, it gives us an opportunity to get those perceived weaknesses out in the open up front so we won’t need to fear this kind of dialogue in the future.
Holly Harrington, Co-founder at Everiii
Equity
- Splits: What is the equity split and is it even? I recommend 50/50. Watch out if someone thinks they should have 80% or even 10%
- Investment: If we put in cash, how is it dealt with? Debt repayable from investment, convertible debt, sunk cost as an equity investment? Are you putting in the same amount?
- Vesting: Are we both committing to founder reverse vesting so that we’re both committed and even a one year cliff? Will you legally back up your commitment?
I ask potential co-founders “what do you want to do in life” I ask this because I want to know what ties their purpose to the startup -why doing this matters to their identity. If their purpose cannot be fulfilled by the startup, than I know they are not committed.
Marcus Ellison, Founder & CEO at VentureMark
Execution
- The short term: Who is going to be accountable for what in the first 6 months (before you have staff etc)? There is going to be so much to do, and people will need to deliver
- Funding. Is this a VC funded approach or a bootstrapped? You don’t want to find out your cofounder doesn’t want to raise money, or that they do…
- Pivoting: If things aren’t working, are we both OK to keep testing new things? You better both be
- International: Do you have the same views on expansion plans? In some regions you have to be regional at least. Are you on the same page about how you would manage this?
- Prioritisation: What are the three things you could be working on right now and what are you working on- how are you making it happen? You need to know you are not going to be messing about chasing the wrong goals at the wrong time. Will your cofounder make logical, prioritised plans and execute on them?
Can you explain our business to your daughter?
Wilson Capitão, Founder ENI
Do you have a wife or kids?
Ying Wang, Co-Founder at Venuemob
Culture
- Culture: What is your perspective on a great culture? Culture matters and it’s set from the top and rots from the top like a fish. Do you have similar views about how to treat and communicate with people?
- Staff trust: Do you have a view of trust and openness? What kind of person will succeed here? Do you want to hire amazing people and let them fly or are you a B player worried they suck and will lose control
- ESOP: What are your views around giving staff proper equity to incentivise them to kick ass? You don’t want to be super cheap with equity. What are you OK giving the staff? What about the first 5 staff?
- Value: What would be your top 5 values? What company do you admire? You can learn a lot from someone by what they value and articulate
- Tech vs business: Do you value business or tech more? POWA for example was a tech company that valued sales people more (and that worked out great. Not). You can tell by asking ‘what would the first 5 staff do?’ or ‘what are some products you admire and why?’
- Developing staff: How do you help people grow to the next level and be their best? Your staff are your bedrock. If you don’t believe in attracting, retaining and developing staff you are not going far
Can you see us working together still in 10 years? Because building a successful company may take that long.
David Passiak, Co-Founder and Author at Co-Create the Future
And a very long comment worth sharing…
Why bother with a startup? You can get more money working for a salary. You’re less likely to lose all your money starting a traditional company. And while we could be millionaires, we’re not going to be Bill Gates.
This fishes out a lot of the red flags.
The worst partner I ever had and the best partner both have said they’re in it for the money… big car, big house, big titles. Which is why the question is more than 1 sentence.
The worst partner wanted power. He wants to treat his employees like shit to make himself feel good. The best partner is really in it because he wanted the adventure, the path less travelled.
This also fishes out whether the guy actually has enough money to live on for 6 months, or needs a bit of salary, or is loaded. This opens uncomfortable conversations.
It also fishes out their skills. Someone could say “I could easily get a job with EY or Google but I’m doing this because...” vs the ones who are like “I can’t join the workforce because women aren’t accepted in the construction industry.” The most interesting I hear is “I inherited a lot of money from my dad/I just got retrenched and now I want an active investment.”
You also want to fish out the people who just want to put in a few dozen hours or put in some money and then sit by passively. You don’t want guys who won’t quit their jobs as a co-founder. The answer will let you gauge how well they take responsibility.
Some people also get excited at owning a business, but don’t sit and consider that they’ll be losing money at first, with a very significant risk. Some have it as a last shot – they drop out of school, have little savings, can’t get a job. This question forces their commitment.
And most of all, you want to know that when (not if) things go bad, they will be in it. Those who simply see it as the best offer won’t. Those who care insanely about the value proposition will be very committed.
Syed Muzani, Co-Founder, Foodbits
Your turn! What do you think are the key questions to ask?
Video on YouTube
If you want to watch the video version of ”What questions to ask potential cofounders?” You can watch below:
Read: What is the difference between a founder and the board of directors?
