

Questions for Co-Founders (Gabor Cselle) - jbyers
http://www.gaborcselle.com/blog/2008/11/questions-for-cofounders.html

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jbyers
This is a strong set of questions. The only one that didn't ring true was #8,
ownership. For a two-founder company, I strongly believe that 50/50 is the
correct structure. Anything less breeds long-term ill will.

What if, as Gabor notes, contributions are unequal? For early stage startups
and minor disparities, I'd say skip it and still go with 50/50. The amount of
future contribution (and potential for conflict) by both parties will be huge
compared to than what's already been done. If someone really is coming to the
table with a vastly larger contribution to the company, and intends to bring
on a co-founder, I'd challenge the pair to very carefully consider whether the
second person is a founder or a highly compensated key employee.

~~~
biohacker42
I think 50/50 is the worst structure.

Someone must have the last word, and that's actually less stressful.

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jbyers
If two founders can't agree on a critical decision, is the situation any
better if they're 70/30 rather than 50/50? The person who "loses" will not
feel good about it, and I think that feeling is compounded by the inequality
in ownership. 50/50 drives you engage your partner in hard decisions and get
to a solution you can both live with.

~~~
biohacker42
But what if you can't agree on a decision, but you could live with one partner
having the last word?

Say we agree on you taking the 51% side, then I have to think up front if I
can live with you winning every time we can't agree.

We'll be agreeing most of the time and if I'm an adult I can live with the
occasion when we disagree but you have the last word.

The worst case scenario here is that over time I can't take it and refuse to
participate.

That's pretty bad, but the worst case scenario with a 50/50 split, is
paralysis thus guaranteed failure.

I am not saying 51/49 is fair, I am saying its wort case failure mode is just
a bit better then the 50/50 split worst case failure mode.

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nostrademons
9.) What would each cofounder rather be doing, if they could do anything at
all in the world?

This was an issue with my last startup. We started with 5 founders, but for 3
of them, the answer was "my day job", and we had to get rid of them at an
early stage. My other cofounder was very upfront with me from the beginning -
he was all in with this particular startup, _unless_ he got into Stanford or
Harvard Business School. Well, he got into Harvard, and that was the end of
that partnership. For me - I probably would not have abandoned my partner, but
once he'd already left, I folded the startup when I had the chance to work
with a YC startup, even though I didn't end up taking the cofounder position
with them.

10.) What're your expectations regarding the amount of pressure you'll be
putting on yourselves?

This is more than just working hours - it's also how seriously you beat
yourselves up when you miss a deadline or things don't go your way. It's
really important to find someone who's compatible with you on this; a laid-
back person and a neurotic one working together tends to lead to a lot of
conflict.

Windows auto-update is kicking me off now, but I may think of more in the
morning.

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callmeed
The whole concept of interviewing someone and deciding to be an active co-
founder with them seems odd to me. Almost like asking a girl to marry you
after dating for a month.

I guess it can work out if you cover the right bases. From my experience, my
co-founder relationship is great because we've been friends since high-school
and we complement each other well.

The only time we took on a 3rd co-founder/partner turned out bad. So, maybe
I'm just gun-shy.

~~~
gaborcselle
You also have to address these questions with people you've known for a long
time. They're just easier to address with people you've known for a long time
:-)

~~~
callmeed
Totally agree–most people I've known for a long time would still make bad co-
founders.

I guess I just feel like some things can't be known quickly, including
possibly #6 on his list and other things he didn't list.

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ojbyrne
One thing I really hate is "co-founder." I like "founders" better. Because
before you know it, there's a "founder" and then there's "co-founders", and
its all kind of bullshit over nothing (except money, and the sudden appearance
of unwritten liquidation preferences, and the long slow road to self-
destruction that those things breed). I don't really have a problem with
equity being split asymmetrically, but I think everything else should be fair
and proportional.

~~~
asmosoinio
So what the deal with "founder" vs "co-founder"? English is not my first
language, and I am not sure I understand the difference correctly.

Founder / founders came up with the original idea? There can be many, right?

Co-founder is the next person/persons that came in at a really early stage?

Only semantics? Or a big deal?

~~~
pchristensen
I think it's the ambiguity and uncertainty that bugs people.

I think of founders as the people who decide to do the startup. If they decide
and then bring people on before they have gotten very far, I would consider
those cofounders. There's a little bit of seniority difference but each person
would be just as critical.

For instance, I've got a one-man startup GeekStack (<http://geekstack.com>).
I'm the founder. I don't have much done, just organizing, planning, and a
marketing website. I'm talking to some of my college friends about joining me,
and at this point, they would be cofounders. If they outwork me or turn the
project in a direction I hadn't thought of, I'd probably consider them equal
founders. If they join me in 4 months when I have printed my first set of
cards, they would be early employees. Does that help?

BTW, anyone with graphic design skills interested in making trading cards of
CS heroes, my email's in my profile :)

~~~
asmosoinio
Thanks, yes that helped. Mostly what I thought already, just wasn't sure.

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markessien
It's slightly irritating when a name is put beside a post, and I don't see any
reason why this person is supposed to be famous. And the site is very focused
on whoever that is.

If you write good content, let it stand for itself, and don't try to sell
yourself together with your content. Sooner or later, people will turn against
you.

~~~
ed
It's branding. And it's entirely relevant who's dispensing the advice.

~~~
dbrush
Agreed. For instance:

"How to build a company with a market cap of $180 billion" - Me

vs.

"How to build a company with a market cap of $180 billion" - Bill Gates

Also, having gone through the very same process Gabor is, I can say the
content does stand on its own merit.

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kul
equity should also be split to reward risk taken. if the downside for one
founder is much higher than for the other, he should be rewarded more. e.g.
one co-founder can easily go back to college or consulting whereas the other
really has to make the startup work or else. all with appropriate vesting, of
course.

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edw519
My favorite question:

Under what circumstances would you do a spontaneous "happy dance" without even
realizing it?

My personal answer:

1\. When something really cool that I wrote runs for the first time.

2\. When the Pittsburgh Steelers score a touchdown.

Knowing what _really turns someone on_ tells you a lot about them.

