
Paths to $5M for a startup founder - revorad
http://www.gabrielweinberg.com/blog/2010/06/paths-to-5m-for-a-startup-founder.html
======
nhashem
So many successful startups began as two or three good friends kicking around
some ideas at dinner or drinks, or relaying some spike of insight they had
during a seemingly insignificant conversation. Whenever I think I have The
Next Great Idea, I know my first thought is, "man, I could be on to something
here, let me talk to Joe about this, I bet he'd love to work together with me
to see if this would work!"

It is is definitely NOT, "oh well I'd better just go ahead and execute and get
a product out and get customers all by myself, and then talk to Joe and cut
him in for less equity, because I want to set myself up for needing only a
$17MM acquisition to make $5MM."

Now none of me or Joe's Next Great Ideas have ever panned out, so maybe we're
doing it wrong. But I still don't think trying to optimize for a payout when
considering co-founders is doing it right, either.

~~~
redsymbol
I believe it depends on the personality of the entrepreneur. For some, working
together with others is much more likely to produce success. Richard Branson
seems to be in this category, and it sounds like you are too.

At the other extreme, some founders' personalities are such that they almost
have no choice but to build it completely on their own - a "lone ranger", as a
investor I once knew put it. My favorite example of this is Felix Dennis,
founder of Dennis Publishing (which publishes Maxim, and many other
magazines).

(That's not to say lone rangers build their company alone; if that's ever been
done, I don't know about it! But the additional key people are employees, not
founders, and may not even get equity.)

Aaron

(edit: grammar)

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dlevine
I think that the way to succeed is NOT to fuck over your co-founder. I know of
places where that has happened, and it is not a happy situation. You don't
really want to optimize for the present, but on building connections that you
will keep for the rest of your life. It is super-easy to throw someone under
the bus so that you do better now, and a lot harder to make sure that you all
make a bit less but continue to work together in the future. Don't be short-
sighted.

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Androsynth
The only conclusion he draws in this article is not to take on a third founder
immediately, everything else is just numbers and showing what happens in the
typical acquisitions all the way out to the extremes.

He's not advocating single founder startups, stop the pointless arguments.

The most interesting part: "if you raise a third round (or even a fourth),
that pushes the needed sale price up further. If you're at 10% founder share
with two co-founders, you'd need a $100M exit to get your $5M."

Yikes.

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alain94040
Interesting, but just like Jason's criticism of the startup genome project,
I'd say optimize for what is most likely to lead to success. Do you need a co-
founder? Yes, if you find a great one who adds value.

It's all about creating value.

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sayemm
Interesting... this was posted a year ago and was also discussed on HN before
too.

Anyhow, this combined with his post on the startup career path
([http://www.gabrielweinberg.com/blog/2010/11/are-you-in-a-
sta...](http://www.gabrielweinberg.com/blog/2010/11/are-you-in-a-startup-
career-path-or-are-you-one-and-done.html)) are two of the very best pieces of
advice you're going to get IMO. @yegg is the man and his posts always deliver.

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dreamdu5t
That many successful startups have multiple founders does not mean that
multiple founders are required for success, or a recipe for it.

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ubasu
Previous discussion:

<http://news.ycombinator.com/item?id=1408564>

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dgunn
I think it's very useful to actually see, in numeric format, a continuum of
possibilities. I think it’s wrong to create a blanket rule of, “every great
startup shall have >1 founder” as some projects simply won’t need more than
one. That said, it’s also smart not to dilute unnecessarily. If you actually
need a larger team, I say get a larger team. If not, do it yourself. Either
way, it’s a decision that should be made rationally, not because you read an
article that said you’ll fail without a buddy.

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catilac
I don't think the point is to be a single founder, but to think hard before
bringing someone else onboard.

Personally, I'd prefer to have a co-founder, but only one.

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pitdesi
pg's take: <http://www.paulgraham.com/startupmistakes.html>

1\. Single Founder

Have you ever noticed how few successful startups were founded by just one
person? Even companies you think of as having one founder, like Oracle,
usually turn out to have more. It seems unlikely this is a coincidence.

What's wrong with having one founder? To start with, it's a vote of no
confidence. It probably means the founder couldn't talk any of his friends
into starting the company with him. That's pretty alarming, because his
friends are the ones who know him best.

But even if the founder's friends were all wrong and the company is a good
bet, he's still at a disadvantage. Starting a startup is too hard for one
person. Even if you could do all the work yourself, you need colleagues to
brainstorm with, to talk you out of stupid decisions, and to cheer you up when
things go wrong.

The last one might be the most important. The low points in a startup are so
low that few could bear them alone. When you have multiple founders, esprit de
corps binds them together in a way that seems to violate conservation laws.
Each thinks "I can't let my friends down." This is one of the most powerful
forces in human nature, and it's missing when there's just one founder.

~~~
dstein
Can anyone give some examples of big companies that were solo founders? I
think Dropbox was.

~~~
xiaoma
How about Richard Branson, Felix Dennis, or Jeff Bezos?

~~~
arram
Richard Branson had partners when we started Virgin Records. After Virgin
Records, he had enough money to hire for all his other businesses right off
the bat. Felix Dennis was solo, and strongly believes in holding on to as much
equity as possible, but if you read his book, he'll tell you what a miserable
time it was. (He often wished he was dead.)

I've bootstrapped a business to significant traction as a single founder. I
don't recommend it. It's possible, but morally exhaustive.

