Your cofounding team and the set up around it (including equity split) is very likely the most important decision you are going to make about your business and one of the most important defining criteria for the future success or failure of your business.
It is also the aspect that will largely determine the capability of your business to raise external funds.
So is there a magic success formula?
I am very sorry to disappoint you, but there is no magic formula for successful cofounding teams. There are however some helpful guideposts:
# 1: Nr. of cofounders
Typically, recommended cofounders number is between two and five. Important criterion is starting from the needs of your business – and you should have all the essential resources your business needs (human, intellectual, financial, social) ideally within your cofounding team. On the flip side – every cofounder does increase the complexity of managing and setting up your team exponentially – so, as much as needed, but not more than that.
# 2: Diversity
Diversity helps teams to be more creative, innovative and make better long term decisions. Diversity includes different backgrounds, education, culture, gender or other. You need to think of what type of diversity is beneficial for your business (considering your target customers, ecosystem, partners, suppliers) and also realise that the down side of diversity is that your decision making process is likely to be slower (than when you are all very similar)…but better!
# 3: the right set up
Once you have the right cofounders number and mix, the success key is the team set up – from alignment of the cofounders (business purpose and values), allocation of roles and responsibilities, setting cofounders milestones and performance, defining commitment and contributions up to equity allocation and recovery.
It would not be a full picture though if I did not mention that – even though behind the majority of successful business there are cofounding teams – it is not easy to build them! Unfortunately, about 70% of business partnerships fail because of cofounders’ issues. So as much as I do recommend partnering up, I am also a very strong advocate of doing it right.
You can join the LikeMinded event and connect with industry experts, tech-people, and business cracks and possibly find your future cofounder.
If you want to know more about cofounding: Get Cofounding the Right Way.