360° Coverage : Five Co-Founder Scenarios, Five Different Results

2 Updates
Five Co-Founder Scenarios, Five Different Results

Five Co-Founder Scenarios, Five Different Results

Feb 14 2014, 9:10am CST | by

By Pablo Villalba, founder, 8fit.com. I started Teambox, my collaboration software company, as a sole founder. Because of this, I have been able to keep a relatively high percentage of the company (...

Filed under: news

 
 
 

28 weeks ago

Five Co-Founder Scenarios, Five Different Results

Feb 14 2014, 9:10am CST | by

By Pablo Villalba, founder, 8fit.com.

I started Teambox, my collaboration software company, as a sole founder. Because of this, I have been able to keep a relatively high percentage of the company (over a quarter even after our $7 million funding round). That’s huge financially. But even with that, I don’t feel real ownership of the cap table.

I have since realized that it’s not all about equity — so I decided to start my fitness app 8fit with co-founders because I want to work closely with people who feel real ownership of the business.

When I built my first few companies, I tried several different approaches to the co-founder question, all of which failed. Here are the five scenarios I went through so you can learn from my mistakes:

1. No Alignment

In my first company, there were three founders, who all had equal parts. We had clear divisions of responsibilities, but also very different visions of what the company should be. One imagined it as a little incubator with lots of mini companies, while I saw it as a consulting firm.

Eventually, only one SaaS project took off, which I decided to lead. As it built some revenue I had to buy off my partners’ equity to reclaim full ownership. The revenue got to covering a salary and — after stagnating for some months — I decided to sell it for just a few thousand dollars.

Lesson learned: If the visions of the founders don’t match, you’ll feel like you’re working alone.

2. No Ownership

Next I tried to launch something more ambitious: we’d manufacture quadracopters to deploy power lines across the country in a clean and efficient way. It involved heavy research and development, legislation, and selling to large energy companies. I brought in partners from each industry and we invested a tens of thousands in the project. I had barely one-eighth of the company, and we hadn’t even looked for outside investors.

As difficulties arose, nobody had a real sense of ownership over the project – it felt like a part-time job to all of us. Because of my inexperience and our funding, legal and technical problems, we simply let the project die.

Lesson learned: Building a company takes all of your creative energy. Look for enough ownership to make you feel a part of it.

3. No Added Value

I was still dying to build a real SaaS company, so I jumped into the first opportunity I found: 49-51 percent partnership with someone who would work for and fund it equally.

I put my life into the project, putting 10-hour days into my first attempts at coding. My co-founder followed it from a distance while keeping his day job and never contributed anything beyond a few forecast spreadsheets. Eventually the project got traction, and I moved to full-time status to raise funds and work on the company. To me, his decision to stay at his job already meant that he was completely out. Soon after that, we closed the company down and I moved on.

Lesson learned: Choose co-founders by the value they add to the company, not just the funding./>/>

4. No Co-Founders At All

Teambox will always be a single-founder company.

My real partners were the early investors and employees who joined us. They got great returns, I kept a high percentage of ownership, and everything worked out well. It’s been a great, fair and financially appealing experience.

However, it’s hard to align people who have different interests. Sometimes I felt alone, or that I missed a certain point of view.

Lesson learned: For support in the early days, employees can often be as good as co-founders.

5. No Investor Majority

It is my personal dream to help others lose weight and get fit, so for 8fit, my goal is to surround myself with people who think of this mission as their own. I want partners who are better than I am. I want to build a billion-dollar company with a small team and high revenue per employee, or fail trying to get there.

I want a close connection to our customers and for the company’s spirit to be embodied by the founders.

Lesson learned: There is no right answer. Funding and co-founders can go hand in hand.

Wrapping Up

Your early choices will make up the DNA of your company. Co-founders can be amazing support, but they’re not indispensable. Avoid working with someone who doesn’t fit your vision just because you need their skills — it will backfire.

Look for cultural fit, talent, involvement and ownership, and don’t worry too much about which form it takes. Happy founding!

Pablo Villalba is the founder of 8fit.com. Previously, he was the founder of @Teambox_app/@RedboothHQ ($7M raised, millions in revenue).

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Source: Forbes Business

 
Update
2

14 hours ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,00 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

1 day ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and MH17" hits home ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Mysteries of space dust unlocked
New York, Aug 30 (IANS) A new analysis of space dust has revealed that the cosmic particles, wich are likely to have originated from beyond our solar system, are more complex in composition and structure than previously imagined.
 
 
Global road mapping to balance development and conservation
Washington, Aug 30 (IANS) Did you know that over 25 million km of new roads will be built worldwide by 2050, encircling the earth more than 600 times? Keeping the above fact in mind, a study has created a global map for prioritising road building across the planet to balance the competing demands of development and environmental protection.
 
 
India, Japan sign Kyoto-Varanasi partnership agreement
Kyoto, Aug 30 (IANS) India and Japan Saturday signed the Kyoto-Varanasi partnership agreement, an official said.
 
 
Experimental Ebola drug cures infected monkeys
Toronto, Aug 30 (IANS) In what appears to provide new hope for people infected with the deadly Ebola virus, scientists have successfully treated all the Ebola infected monkeys with an experimental drug called Zmapp.
 
 
 

Latest from the Network

Ukrainian cargo plane crashes in Algeria
Algiers, Aug 30 (IANS) A Ukrainian cargo plane crashed Saturday in Algeria's Tamenrasset province. According to rescue officials, the crash occurred at 1.40 p.m and no survivors were found, Xinhua reported. The...
Read more on Politics Balla
 
Mysteries of space dust unlocked
New York, Aug 30 (IANS) A new analysis of space dust has revealed that the cosmic particles, wich are likely to have originated from beyond our solar system, are more complex in composition and structure than...
Read more on Apple Balla
 
Suri Cruise reunited with lost dog
Los Angeles, Aug 30 (IANS) Actors Tom Cruise and Katie Holmes' daughter Suri has reportedly been reunited with her lost dog Honey. The eight-year-old was devastated when her new Chihuahua named Honey disappeared in...
Read more on Celebrity Balla
 
Global road mapping to balance development and conservation
Washington, Aug 30 (IANS) Did you know that over 25 million km of new roads will be built worldwide by 2050, encircling the earth more than 600 times? Keeping the above fact in mind, a study has created a global map...
Read more on Apple Balla
 
Blind leaves Ajax for Man-U
The Hague, Aug 30 (IANS) Ajax and Manchester United have reached a deal for the transfer of Daley Blind to the latter, Dutch newspaper De Telegraaf and national broadcaster NOS reported Saturday. According to the...
Read more on Sport Balla
 
Tough away games for Barca, Real Madrid
Madrid, Aug 30 (IANS) FC Barcelona and Real Madrid both face testing away trips as they play their second game of the Spanish Primera Liga season Sunday. Barcelona, fresh from a comfortable and moral boosting 3-0 win...
Read more on Sport Balla
 
India, Japan sign Kyoto-Varanasi partnership agreement
Kyoto, Aug 30 (IANS) India and Japan Saturday signed the Kyoto-Varanasi partnership agreement, an official said. The partnership, which focuses on how to preserve heritage while building smart cities, was signed...
Read more on Politics Balla
 
Gremio bans fans over racist abuse
Rio de Janeiro, Aug 30 (IANS) Brazilian club Gremio have banned five fans from attending home matches after their involvement in the latest racism scandal to hit South American football. Santos goalkeeper Aranha was...
Read more on Sport Balla
 
Pato attracts Galatasaray interest
Rio de Janeiro, Aug 30 (IANS) Former AC Milan striker Alexandre Pato could be headed to Galatasaray before Monday's European transfer deadline. But the Turkish club must meet the 24-year-old's 15 million euro release...
Read more on Sport Balla
 
Colombia recall Falcao for Brazil friendly
Rio de Janeiro, Aug 30 (IANS) Colombia coach Jose Pekerman has recalled Radamel Falcao for his team's international football friendly against Brazil next week. The Monaco striker missed Colombia's World Cup campaign...
Read more on Sport Balla