Thinking of Going Solo? 7 Reasons You Need a Co-Founder.
There are few decisions in business that are more important than deciding whether you'll "go it alone" or team up with someone that you may, or may not, already know. Although there are a couple of reasons that going alone might sound appealing -- like owning more of the company and being completely in control of decision-making -- there are considerably more that should direct you otherwise.
Let’s have a gander at a short list of reasons why you should reconsider a solo career in entrepreneurship.
1. Starting a business is hard. Really hard.
When you have the idea for your new startup it’s easy to get excited -- after all, you’re going to sell for a zillion dollars and have your birthday set as a national holiday, right? Yep, the adrenaline is flowing. Then you begin executing on your fancy new idea, only to realize that there is a heck of a lot of work to be done. While struggling to keep your head above water isn’t terribly fun, doing it alone is much worse.
2. Distribute the stress.
As a result of the enormous amount of work that is required to launch a new enterprise, mountains of stress inevitably come. Do you know what you can’t do -- or shouldn't do? Take it home with you. Now I realize that this may not be entirely realistic but it’s important that you know in advance that your significant other and/or children aren’t going to understand what you’re going through and no, you can’t vent to your employees -- they’re not your friends.
As a solo entrepreneur you’re never going to feel more alone, so put yourself in a situation to share the stress with someone that you’re working with every day.
3. Nobody will understand your business like you do.
This is a point that cannot be stressed enough -- if you’ve never started a company before, I can assure you that the number of details and intricacies will be orders of magnitude greater than your wildest expectations -- and the only person that will understand them like you, when you need help the most, is a co-founder.
4. Problem solving can't be one-sided.
We know that problems are going to come up -- no need to beat a dead horse. The issue is that you’re going to need the perspective of another person that understands your business like you do, and that person can only be a co-founder. It’s equally as important that you have an opposing view. Hiring a co-founder that thinks like you do and shares the same opinion won’t be much better than having no co-founder at all.
5. Advisors are advisors, not partners.
You may have gone out and built the greatest crack squad of advisors imaginable. The problem is that you can’t call one of them at 11:15 at night when you’ve had a "eureka" moment or are struggling to come up with a solution to a problem -- even if they said you could. Keep in mind that their job is to provide you with advice on an "as needed" basis, which is typically going to be for larger problems than those that appear multiple times throughout the day.
6. Split the early and out-of-pocket expenses.
Hopefully this doesn’t come as much of a shock, but starting a business can be expensive -- and fundraising early and without a product or prototype is really difficult, unless of course your grandfather invented Velcro. The opportunity to work with a co-founder will allow you to split the initial costs of getting a working product or prototype going, which will in turn allow you to raise funds at a better valuation.
Are you concerned about giving up equity? Don’t be. Would you rather own 50 percent of something or 100 percent of nothing?
7. Mitigate risk for investors.
At Beachwood Ventures, we’re rather opposed to investing in single-founder companies -- that’s not to say we won’t in circumstances where the founder is a repeat entrepreneur with past success, we just prefer a team with at least two founders. Yes, having too many founders can also be troublesome, but that’s a different article.
The potential problems here are many. If the founder has a major problem in the highest levels of the new company, he’ll be relying on employees of the company for help -- whom have a different mindset and priority base -- as well as people outside the company that won’t understand the intricacies like the founder will.
If the founder burns him or herself out or gets hit by a beer truck, both the company and our investment are likely gone -- sorry to be morose, it’s just reality. Unless it’s a truly otherworldly opportunity and all the stars align, it’s just not worth the risk as an investor.