What’s the best for your startup – having one, two or more founders?
The following answers are provided by members of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. One Good, Two Better, Three and Too Many Chefs in the Kitchen
It’s good to have one founder because there is no conflict that may hinder company development. However, two founders also offer the opportunity to leverage more skills, knowledge and contacts than one founder may have. While there is bound to be conflict, the other benefits typically outweigh this one potential risk. Any more than two founders and it becomes too complicated.
2. Multiple Founders Works for Us
At eFin we have three founders. I bring the sales and marketing, one brings the tech, and the other brings the organizational and financial experience. We have all of our bases covered, and there is no need to hire anybody who would generally command top dollar as an expert in any of these fields. This saves us money and allows us to be more efficient in achieving our goals.
3. One Is Best, Unless Two Is Better
The number of founders should really depend on what your startup’s needs are. Many founders bring on a business partner for emotional support. This is a mistake. If your reasons for having two or more founders is that you each bring unique and independent skills, then multiple founders are a benefit.
4. One Is Better for Your Mission
If your company has a specific mission or vision in mind, it can become endangered when there are too many chefs in the kitchen. I’ve seen it time and again: entrepreneurs partner up after an initial idea, and then have some shattering disagreements when there’s money on the line. If you do partner, make sure you get a lawyer, and work out what to do during a disagreement before it happens.
5. More Founders Means Stricter Structure
Two founders can be a great choice, especially if they bring different expertise to the table. Even at two, and certainly beyond that, it’s important to draw the lines of where power is separated very clearly. The more founders there are, the more sides there can be in any argument, so you want to keep that number as small and as intimate as possible.
6. Two Is the Sweet Spot
Based on experience, I recommend two co-founders. Three could work, but one must be a technical co-founder who can build the product. Any more than three is not desirable. After three, the dilution will really affect the individual equity ownership of the partners. Two is a great sweet spot, and you can hire other key people with incentive packages.
7. More Owners Means Less Equity
When a company has reached profit maximization and equity has to be split between more than two people, the choice is now whether a new strategy will be developed in order to move the business to the next level or sell. No matter how great your profit, nobody will be able to take the lion’s share of it. Less equity for an individual founder might cause the business to stagnate, or worse, die.
8. One Founder Means One Common Goal
I prefer a business that has one founder, especially if it’s the original founder who started the company and is truly dedicated to the success of the business. It’s then up to the founder to surround himself with a team of dedicated and experienced individuals to help grow the company and boost morale. Some of the greatest brands in the world today all started with a single great founder.
9. I Needed a Technical Co-Founder
Typically, the people who are great at the “building” side of a business aren’t the same as the people who are good at the “operations” side. My specialty is in marketing and operations, whereas my co-founder’s specialty is in development and product. This works out perfectly, and we create a balanced leadership team. I recommend having at least one other co-founder to bounce ideas off of.
10. Always Have Just One
Partnerships are like a marriage: It’s easy to fall in love, messy to separate. If at all possible, don’t bring other founders on board. Hire talent, fundraise, grow organically, look for investors — but don’t give away part of your company. If things don’t work out, the negative impact on the company can be devastating.
11. Two Is Better Than One
The weight of running a company is too much for just one person. Yes, ideally you’ll have a passionate team that will burn the midnight oil with you, but there’s nothing like having a partner to share your worries with (and other things you can’t talk about with the team). When you look at successful companies, you’re much more likely to find ones started by two or more founders than just one.
12. Three Is Ideal
Having two founders who come from different backgrounds is great, as you both can contribute various experiences and can split up tasks based on who has the most relevant experience. In some instances, when major decisions must be made frequently, having three is the best. An uneven number of votes can help swing a deadlocked decision in one direction.
13. An Odd Number Breaks Ties
I think odd-numbered decision makers are best to break ties. Ideally, you want a mix of founders who are very different from each other but share the same values and vision for the company. I think that’s the most important factor. Then, quantity does not really matter anymore.
– Andre Chandra, I Print N Mail
14. Solo Founders Are Less Successful
Solo founders are less successful than teams of two or three. Adding a second founder doubles the human capital and increases idea velocity through collaboration. In fact, one plus one really does equal more than two. When the count is above three, success rates lower because teams move slower with communication and coordination between all parties increasing.