Debating the 'Co-foundership Mythology' (Views: 5476)
Wed, 12 Sep 2012
Last May, venture capitalist Mark Suster blogged about a talk he had given at Stanford University. He largely (and carefully) argued against co-foundership.
“There's kind of a mythology in Silicon Valley which is that the co-founders model is the only model,” said Suster. “Just because this model has worked doesn't mean the model works.”
He stated that too many personal variables could come into play between co-founders. Like a marriage, the two former friends could end up bickering. One partner devotes his life into the company while another wants to devote his to his family. Suster claims he spent so much time “as a marriage counsellor.”
He warns us that too often when co-founders split up, one of them takes a heavy financial burden, especially if a founder vesting schedule was never established.
“It is not uncommon to see startup founders walk before raising capital and take large pieces of equity with no vesting,” he wrote in his blog. “That means that the people who stay get to work their arses off to try and make money for the person that walked. Why risk it?”
Several Montreal start-up founders had their say on the issue. Training Mobs co-founder David Sciacca established a vesting schedule. Like Suster, he states that if you don't have founder vesting “you're crazy”. Despite admitting that his company has experienced problems in co-foundership, he says it's been a very good experience.
“Going at entrepreneurship alone is exceptionally challenging,” said Sciacca. “Having a co-founder is often helpful at giving you a reality check when you're floating on cloud 9 because you've locked down a client or giving you a booster shot when you lost a client or you didn't get a round of funding you thought you'd get.”
“Inevitably you're better as a team as you would have been solo.”
Another Montreal start-up founder agrees. reelyActive co-founder Jeff Dungen can see why sometimes in the 'marriage', one person loses interest. “The biggest key to success has been the team aspect and the focus. You have to be with people who operate as a team and you have to maintain focus. If you have both of those it works,” said Dungen.
The former consultant put most of the equity in and is the main co-founder of reelyActive. He has an established vesting schedule over two years, where a 'leader' decision can be made easier when necessary.
Christian Lavoie worked as a senior software engineer for five years at Google and recently started up his own consulting firm. Like Dungen he commented on the benefits of a team approach.
“There’s certainly some undercurrent of belief where one person alone is a problem,” he said. “There's your basic psychological factors behind how its much harder on your own, it’s kind of like the gym buddy approach. There's also the issue that no one person has all the skills needed.”
by Joseph Czikk
jczikk@fundica.com
“There's kind of a mythology in Silicon Valley which is that the co-founders model is the only model,” said Suster. “Just because this model has worked doesn't mean the model works.”
He stated that too many personal variables could come into play between co-founders. Like a marriage, the two former friends could end up bickering. One partner devotes his life into the company while another wants to devote his to his family. Suster claims he spent so much time “as a marriage counsellor.”
He warns us that too often when co-founders split up, one of them takes a heavy financial burden, especially if a founder vesting schedule was never established.
“It is not uncommon to see startup founders walk before raising capital and take large pieces of equity with no vesting,” he wrote in his blog. “That means that the people who stay get to work their arses off to try and make money for the person that walked. Why risk it?”
Several Montreal start-up founders had their say on the issue. Training Mobs co-founder David Sciacca established a vesting schedule. Like Suster, he states that if you don't have founder vesting “you're crazy”. Despite admitting that his company has experienced problems in co-foundership, he says it's been a very good experience.
“Going at entrepreneurship alone is exceptionally challenging,” said Sciacca. “Having a co-founder is often helpful at giving you a reality check when you're floating on cloud 9 because you've locked down a client or giving you a booster shot when you lost a client or you didn't get a round of funding you thought you'd get.”
“Inevitably you're better as a team as you would have been solo.”
Another Montreal start-up founder agrees. reelyActive co-founder Jeff Dungen can see why sometimes in the 'marriage', one person loses interest. “The biggest key to success has been the team aspect and the focus. You have to be with people who operate as a team and you have to maintain focus. If you have both of those it works,” said Dungen.
The former consultant put most of the equity in and is the main co-founder of reelyActive. He has an established vesting schedule over two years, where a 'leader' decision can be made easier when necessary.
Christian Lavoie worked as a senior software engineer for five years at Google and recently started up his own consulting firm. Like Dungen he commented on the benefits of a team approach.
“There’s certainly some undercurrent of belief where one person alone is a problem,” he said. “There's your basic psychological factors behind how its much harder on your own, it’s kind of like the gym buddy approach. There's also the issue that no one person has all the skills needed.”
by Joseph Czikk
jczikk@fundica.com
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