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

 
 
 

36 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

7 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 the workforce of 20,000 by ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

8 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 tragedie ...
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

IS abducts Iraqi journalists as its positions get bombed (Roundup)
Baghdad/Paris, Oct 24 (IANS) The Islamic State (IS) terrorist group Friday kidnapped three Iraqi reporters in the northern Iraqi city of Mosul even as French fighter jets and Iraqi military helicopters bombed its positions in northern Iraq.
 
 
Ethiopia to deploy 210 health workers in Ebola-hit West Africa
Addis Ababa, Oct 24 (IANS) Ethiopia said Friday it will deploy about 210 health professionals to Ebola-affected countries to support the response against the epidemic in West Africa.
 
 
China offers new anti-Ebola aid to West Africa
Beijing, Oct 24 (IANS) China will provide 500 million yuan (about $82 million) in aid to Liberia, Sierra Leone, Guinea and international organisations to fight the Ebola virus disease, Chinese President Xi Jinping said Friday.
 
 
India, China form Asian Infra Investment Bank
Beijing, Oct 24 (IANS) India Friday signed on to a China-led initiative to create an international bank to fund development of infrastructure essential for Asia's economic growth and reduce the dependence on Western-dominated World Bank and International Monetary Fund.
 
 
 

Latest from the Network

Second MERS case reported in Qatar
Doha, Oct 23 (IANS) A 43-year-old man in Qatar has tested positive for Middle East Respiratory Syndrome (MERS) in the second confirmed case of the deadly virus in 10 days, media reported Thursday. The patient had...
Read more on Business Balla
 
Two people die in Pakistan bomb blast
Islamabad, Oct 23 (IANS) At least two people were killed and 12 others injured in an explosion that took place in Pakistan's Balochistan province Thursday, media reported. The bomb was planted on a motorcycle, Dawn...
Read more on Politics Balla
 
Trott extends contract with Warwickshire till 2017
London, Oct 23 (IANS) England batsman Jonathan Trott, whose mental issues led to his abrupt departure from last winter's Ashes tour, has confirmed his successful comeback to competitive cricket by signing a new three-...
Read more on Sport Balla
 
Srikanth, Kashyap big movers in BWF rankings
Kuala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest Badminton World Federation (BWF) rankings released Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Alvin Stardust dead
London, Oct 23 (IANS) English singer Alvin Stardust died after a short illness. He was 72. Stardust's manager confirmed the news about his demise Thursday, reports mirror.co.uk. He was recently diagnosed with...
Read more on Celebrity Balla
 
Indian man reunited with family after 40 years
Dubai, Oct 23 (IANS) An Indian man, who had disappeared from his hometown in Kerala nearly 40 years ago, has been found by his family at a hospital in Dubai in the UAE, a newspaper report said. Now in his 60s, Abdulla...
Read more on Politics Balla
 
Srikanth, Kashyap, Saina rise in world rankings
Kala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest released Badminton World Federation (BWF) rankings Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Flintoff signs for Big Bash side Brisbane Heat
Brisbane, Oct 23 (IANS) Former England captain and all-rounder Andrew Flintoff, who retired from international cricket in 2009, Wednesday confirmed that he will play for Brisbane Heat in the Big Bash League (BBL) this...
Read more on Sport Balla
 
OPEC daily basket price falls again
Vienna, Oct 23 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $81.94 a barrel Wednesday compared to $82.09 Tuesday, the OPEC Secretariat said. The new OPEC...
Read more on Business Balla
 
Lopez to sign multi-million dollar deal?
Los Angeles, Oct 23 (IANS) Singer-actress Jennifer Lopez is reportedly in the final stages of securing a multi-million dollar deal to perform in Las Vegas. The 45-year-old is being offered $350,000 per show at The...
Read more on Celebrity Balla