02: Starting the Business
Co-Founders and Early Team
Previous to starting TeaSquares, I ran a meal kit delivery business all by myself. I was the only founder, recipe developer, web developer, sales team, delivery driver, etc. and it was exhausting. So when I pivoted to TeaSquares, I knew I wanted to bring on other co-founders with complementary skills to share the load. I ended up bringing on 4 co-founders, which brought its share of benefits and complications.
Starting a business can be lonely, so bringing on a co-founder can feel like a great way to share the journey. That said, there are a number of considerations you should know before giving someone a large chunk of the business.
The Co-founder Marriage
Bringing on a co-founder is a lot like getting married – it’s commitment and partnership that ideally should last the lifetime of your business. The problem is that while most people may date a romantic partner for a few years to figure out compatibility, most co-founders start a business together after working together for only a few weeks or months.
There are a few inflection points that lead founders to bring on a co-founder:
- Co-developing the idea together
- Need someone with a skill you don’t have.
- Want an employee, but don’t have money to pay them.
- First time founders who feel like they lack experience.
You need to ensure alignment in values, vision, and working styles. Here are the key questions you should ask yourself and your other co-founders before taking the plunge:
Vision and Values
- What is our vision for the company?
- Are we aligned on where we see the company in 1, 5, or 10 years?
- How do we envision the company growing and evolving over time?
- What are our core values?
- Do we share the same fundamental beliefs about how the business should operate?
- How important are aspects like company culture, social responsibility, and work-life balance to each of us?
Roles and Responsibilities
- What will our specific roles and responsibilities be?
- How will we divide the workload?
- What are each of our strengths and weaknesses, and how can we complement each other?
- How will we handle decision-making?
- What will be our process for making major decisions?
- How will we resolve disagreements?
Commitment and Work Ethic
- What level of commitment are we each bringing to the table?
- Are we both committed to working full-time on this venture?
- How do we each handle stress and work pressure?
- How do we define success?
- What are our personal and professional goals for this business?
- Are we aiming for rapid growth, a steady business, or building for acquisition?
Financial Considerations
- What are our financial expectations and constraints?
- How much are we each willing to invest initially?
- What are our expectations for salary and equity split?
- How do we plan to handle funding and finances?
- Are we on the same page about bootstrapping vs. seeking external funding?
- How will we manage financial risks and distributions?
Exit Strategy
- What is our exit strategy?
- What are our thoughts on potential exit scenarios like acquisition, IPO, or remaining private?
- How would we handle a situation where one of us wants to leave the business?
Conflict Resolution
- How will we handle conflicts?
- What’s our plan for resolving disputes?
- Are we open to mediation or arbitration if necessary?
Personal Dynamics
- Do we have compatible working styles?
- How do we each like to work and communicate?
- Are our temperaments and interpersonal dynamics a good fit?
- What happens if personal circumstances change?
- How will we handle changes in personal life that might affect the business?
- Are we both prepared for the long haul, even if personal challenges arise?
Legal and Operational Foundations
- What legal and operational structures will we put in place?
- How will we draft our Articles of Incorporation, By-Laws, or Operating Agreement?
- Are we aligned on key operational policies and procedures?
Long-term Vision and Alignment
- Are our long-term visions aligned?
- Do we see the business growing in the same direction?
- Are our end goals for the business compatible?
These questions are designed to ensure that both founders are on the same page and can work together effectively. It’s essential to have these conversations early and honestly to prevent misunderstandings and conflicts down the road.