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Why do I need a cofounder to get funding or get into an acceletator?

Why do investors and accelerators insist that you must have cofounders versus just hiring the talent you need?

The idea that equity cofounders are more committed versus a salaried employee…Well I just dont see that being the case these days.

Especially where startups are on every corner or corporations are poaching by offering big salaries to solid candidates.

Quite often equity cofounders don’t follow through on scope commitments. Are actually less dedicated than salaried employees, put the startup as a second or third life priority and often, wreak havoc in major decisions and/or during pivots and are very difficult to dismiss if they don’t deliver.

Why are paid contractors/employees so bad? The economy is built on publicly traded companies run by salaried employees.

I just dont understand the logic. Any insight would be great.

  • By cofounders they don’t mean people who you bring on with the incentive of having equity. They mean people who have the same vision and passion as you. The reason is simple it helps protect their investment if one founder gets hit by a bus or decide to quit. Also having two or more people helps them validate the idea.

    Personally I don’t believe in that more founders are necessary better for a company but I can see why investors prefer it so they talk as if it’s better for the company when it’s just better for them.

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  • I personally believe you have to build a product where investors are banging on your door —to make it these days.

    Anything else is headed towards failure.

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  • They go by the rule of thumb that entrepreneurial teams have a slightly better chance of success than the solo-preneur. There is some data to back that up, but it only increased your chance of success by a few percentage points.

    Its also a litmus test that you are able to convince other people this is a good idea and have them willing to join you. Which means you are going to be able to convince customers to buy.

    Not saying its right or wrong, but some of the pre-reqs are more steeped in dogma than in actual results.

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  • Because they know a single founder won’t compromise as easy. They have to have a way to ensure the manipulation of their desired outcome.

    If they were really looking for the best companies and ideas, they wouldn’t care if you hired someone or had someone that wasn’t equally committed.

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    • No, no, no, no, no…this is totally wrong.

      Speaking from an investor’s perspective, we like multiple co-founders (not just equity participants) for a number of reasons:

      1) If I’m going to open my network, open my checkbook and open my operational expertise to you. . . I want to know that in the population of the entire earth, at least 2 people wake up every day and think 100% about how to make my contributions to you pay off for me (yes, it’s all about me!).

      2) I’m going to assume that you have strong skills in a particular area of expertise. And, what I’m looking for in a co-founder is that you’ve selected/found someone that has complimentary but opposite skills. Why isn’t hiring for that a good idea at the start? It’s the vision thing. Salaried employees weren’t there at the start…they weren’t there when you sat around and discovered the idea that you’re now building into a company and if they were, then they should be co-founders.

      3) One of my personal hangups is ‘paid hitmen/women’ who are brought in to a company and who trade some cash for equity…hate that! You know those people that will help you raise money for either a finder fee or equity stake; yeah, hate that model too. It’s the same thing for me with founders/co-founders; you either believe to the depths of your being that this is the idea to pursue wholeheartedly, or, you don’t. Co-founders have different motivations than equity holders and certainly different from salaried employees. I like it when I see companies who have people that are ‘all in’. They’ve risked their own money, their friends and families money, their personal career trajectory and their personal lifestyle because they believe so much in what you are doing…those are the types of company that have a significantly statistical better chance of making it.

      Good luck and hope this helps.

      Reply

      • You just proved the initial point! Lol!

        Would you rather have one person with a team of people who are the best to do the job? Or would you rather have 2 people that are semi into it enough to make you sleep better at night. You don’t have to answer. I already know that you don’t even know why 2 is better than one. You just think it is… And like you said, it comes down to you.

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      • You probably only invest in two guys that have been friends since middle school. Probably only when they have Asian females. Probably only when some incubator tells you they are amazing.

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  • I think your arrogant response to the kind and detailed answer from the investor above proves why it might get difficult for you to find cofounders, accelerators or investors. Many of us entrepreneurs have edgy characters, but if you don’t learn sales and social skills, you are doomed to be a solopreneur. Nothing wrong with that, just know who you are and find your way. Startup entrepreneurship tends to be a team sport, though.

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  • Appreciate the response from the investor. Understandable points. As far as “commited to the point… derailing career trajectory..” i.e. expecting all cofounders to work fulltime on the startup with no income at all for an unknown period of time. I think this is the main issue for finding any ‘solid’ skilled cofounder thats over 28+ years. The vision, dedication & experience is there, but many have responsibilities, new families, significant bills and cant just live on ramen noodles by choice, for any opportunity, no matter how great, for a least a year or more. Especially when companies today are throwing significant salaries their way.

    I dont think its a problem of convincing a solid person with complimentary skills to believe and commit, but to require them to forgo living expenses and starve themselves and their families indefinitely, to be a part of the team is the problem. And awarding startups with investments or a place at a good accelerator program based primarily on that is alienating a lot of solid startups with real solid skillsets from having that support & opportunity. For younger new college grads, with no idea about the gravity of your investment, the rules makes sense but for teams with some skilled individuals with some business sense and a sense of commitment in their personal lives, its damn near impossible to put that requirement on the team. Am I missing something here?

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  • How many businesses have you seen where the co-founders have been able to work for a really, really long time together ? Look at Microsoft or any other business in your family. It is just a matter of time when the relationship will wear. Some or other thing will come between the two founders….. it is rare, extremely rare to have long lasting relationships.

    I have a cofounder, but it is just to show the world. I do not discuss vision, strategy or execution with him. It takes away my energy, but he can talk well so the the investors will think he is on board.

    My recommendation would be to do what your heart says. If you need someone, go find one. But, if you don’t need one, you may just get one to show the world.

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  • I’m in the same boat…anyone want to connect? I honestly just need a person who is willing to commit and I’m willing to commit…so long as ur transparent and honest about ur personal finances and ur startup I’d love to help u and in exchange u help me? Someone who would compliment me is someone who is introverted and can talk calmly and set a lineral path investors understand….investors, customers and everyone I’ve ever met enjoys my enthusiasm and people skills but they can find me too transparent and unlrofessinal if they don’t understand I’m trying to build trust with them. I need someone who is boring by default but can be crazy….and I’m crazy by default but I can be boring and controlled if I need to be. Does that make sense? Like people form bonds incredibly quickly with me so we might be a good team.

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  • I know of two instances where people partnered up solely to get in to well known accelerators because they couldnt get in as one founder startups. Both got in. The partnerships were over afterward.

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