There are many reasons why having a co-founder is beneficial: Investors typically back startups run by a team of people, you can split the costs, lessen the burden, and have someone you trust on-hand for constant support.
That’s why a recent Medium article caught my eye. The post, which was published earlier this week, outlined how two complete strangers met online and eventually decided to launch a startup together, albeit remotely.
Dave Schools explains how he co-founded Hopin, a live online events platform, with Johnny Boufarhat last year. Fast forward to today and the startup now employs 14 people — seems crazy to think that the co-founders were complete strangers just two years ago.
[Read: 5 tips on how to survive as a remote worker]
This got me thinking: Is setting up a startup with a complete stranger a smart move? And if so, should you at least live in the same city or country?
Long-distance relationships can work
Christos Ellinas, the co-founder and CTO of Nodes & Links, an intelligent software startup that controls the effects and complexities within projects, doesn’t think so.
He met his co-founder Greg Lawton through Entrepreneur First (EF), a talent investor that helps founders find a co-founder, develop an idea, and start a company. To date, EF claims to have helped more than 2000 people create over 300 startups with a combined worth of $2 billion.
Ellinas, who lives in Cyprus while Lawton, also the CEO, is based in the UK, told me starting a company with a complete stranger was “emotionally challenging and mentally compelling” but made sense:
“The odds of finding an individual who wants to found a startup right now, with the same ambition, and sufficient talent are against you.”
“I would say that you have to trust your gut and your head. If you feel uncomfortable working with the other person, it’s probably a bad match,” he added.
Ellinas is right. It’s important to think carefully before deciding to jump into a business with someone you don’t know or know very little about — but this doesn’t mean it’s not feasible.
When it’s right, it’s right
If you are looking for a co-founder and you find someone you think may be suitable make sure you invest time in getting to know them and don’t let geographical location stop you. Just make sure you don’t apply pressure and let trust develop organically.
Be open and transparent. Think about what you both want to get out of the business, align your goals and objectives, and hire a good lawyer to write up a well-researched general partnership agreement covering all bases.
Don’t forget this is a business partnership and while you are allowed to develop a friendship, don’t lose sight of why you entered into the agreement in the first place. Consider how you will hold each other accountable in terms of results and what reporting procedures need to be in place to track performance.
Think about each other’s job titles and split the responsibilities accordingly. Provide detailed job descriptions and clear areas of remit to avoid any misunderstandings and potential issues down the line.
Plan for every possible eventuality and have a plan of action in case your partner — or you — wants to leave the startup. Think about how you’ll each be compensated, how resources will be split, and how this will affect customers.
Finally, if you opt for a long-distance co-founder, then make sure you schedule regular contact. There’s no denying that the world of work has already changed but don’t underestimate the power of face-to-face interaction.
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Published February 19, 2020 — 09:14 UTC