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

 
 
 

31 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

3 weeks 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 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 weeks 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" ...
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

High-level Indian ministerial visits to London next month
London, Sep 21 (IANS/RAY) India's Finance and Defence Minister Arun Jaitley is scheduled to visit London Oct 13-14 for an interface with financial institutions to persuade them to invest in India.
 
 
Expressway to link Vietnam and China opens
Hanoi, Sep 21 (IANS) Vietnam's longest expressway connecting Noi Bai in capital Hanoi and the north-western Lao Cai province, bordering China, with a total length of 245 km, officially opened to traffic Sunday.
 
 
G20 deal on sharing bank data to help India battle black money
Cairns (Australia) Sep 21 (IANS) In a major step that will aid India track and recover black money stashed abroad, G20 finance ministers Sunday agreed on allowing automatic sharing of all bank information with tax authorities at the end of each year, starting 2017.
 
 
Shun sedentary lifestyle to stay sharp
New York, Sep 21 (IANS) Engaging in physical activity and avoiding a sedentary lifestyle are both important for maintaining an adequate brain health in older age, says a study.
 
 
 

Latest from the Network

Denzel Washington: I've no Bond campaign
Denzel Washington isn't campaigning to play James Bond. The 'Training Day' star has quashed rumours he is keen to take over the secret agent role from current 007 Daniel Craig and insists his joke about starting a...
Read more on Movie Balla
 
Six soldiers killed in Egypt plane crash
Cairo, Sep 21 (IANS) Six soldiers were killed and one was wounded Sunday when a military cargo plane crashed near an airport in Egypt, a media report said. The reconnaissance aircraft crashed near the military airport...
Read more on Politics Balla
 
Indian swimmers fail to qualify at Asiad
Incheon, Sep 21 (IANS) Indian swimmers failed to qualify for the finals in their respective categories at the Asian Games held at the Munhak Park Tae-hwan Aquatics Center here Sunday. Saurabh Sangvekar failed to...
Read more on Sport Balla
 
Force India drivers finish in points
Singapore, Sep 21 (IANS) Both Force India drivers successfully finished among the points as Sergio Perez and Nico Hulkenberg ended seventh and ninth respectively at the Formula 1 Singapore Grand Prix here Sunday....
Read more on Sport Balla
 
Indian medallists at 2014 Asian Games
Incheon, Sep 21 (IANS) The following are Indian medallists at the end of the second day of competitions at the 17th Asian Games here Sunday: Gold: Jitu Rai: Men's 50 metre pistol shooting Bronze: Shweta Chaudhary:...
Read more on Sport Balla
 
Afghanistan declares Ghani Ahmadzai as president-elect
Kabul, Sep 21 (IANS) Afghanistan's Independent Election Commission (IEC) Sunday declared Ashraf Ghani Ahmadzai as the new president, an official said. "Since we Afghans do not have computerised ID card, we do not have...
Read more on Politics Balla
 
Indian women settle for badminton team bronze
Incheon, Sep 21 (IANS) Ending a 28-year-old medal drought in badminton at the Asian Games, India Sunday settled for the bronze in the women's team event going down tamely to hosts South Korea in the semi-finals at the...
Read more on Sport Balla
 
'Cape Fear' actress Polly Bergen is dead
Los Angeles, Sep 21 (IANS) Emmy-award winning actress and singer Polly Bergen, still remembered for playing the terrorised wife in the original "Cape Fear", has died, according to her publicist. She was 84. Bergen...
Read more on Celebrity Balla
 
India thrash Sri Lanka 8-0 in Asiad men's hockey
Incheon, Sep 21 (IANS) Playing their first match of the Asian Games at the Seonhak Hockey Stadium here, the Indian men's team defeated neighbours Sri Lanka 8-0 in a Pool B contest here Sunday. It was Rupinder Pal...
Read more on Sport Balla
 
Indian women shuttlers settle for Asiad bronze
Incheon, Sep 21 (IANS) Indian shuttlers had to settle for the bronze in the women's team event of the Asian Games as they lost their semi-final encounter 1-3 to hosts South Korea at the Gyeyang Gymnasium here Sunday....
Read more on Sport Balla