This article is for: Technical startup founders developing software who want to commercialize their technology (help with business development, sales, marketing). Learn how to find a sales and marketing cofounder.
Software developers can create truly innovative products and services. With such a high volume of software startups entering every industry, it can be difficult for a software developer to make their project stand out from the rest without the help of a sales and marketing cofounder.
Without strong business acumen on their side, many of these small ventures end up being treated like a side project or never materialize into a commercially viable business. Although a common trope for software startups involves a non-technical founder looking for a developer to bring their idea to life, the reverse occurs more than you may think!
If you have developed a software product/service but need help in sales and marketing to turn it into a business, this article should act as a guide through that search. The right non-technical cofounder can help grow your business from an app no one has heard of into a worldwide phenomenon!
But no matter how extraordinary your software is, you should obviously not be expecting a prominent CEO to drop what they’re doing to work for nothing at your startup. However, there are ways you can position yourself to find a qualified candidate who is as passionate about your product as you are.
You can make your way through this search by asking these six questions:
Key Takeaway: Non-technical cofounders take on a versatile role that is meant to complement the competencies that you lack. Though managing and optimizing business operations is key, the ability to communicate with those inside and outside of the organization make them valuable.
A business-minded cofounder focused on sales and marketing is your partner in starting and building your software business. They should be viewed as your equal; they manage business development while you manage software development. They generally get a large share in the business and are committed to its long-term success. This means that they are investing in both you and the proposed product; their shared passion should be what drives them to take this risk.
This position can be described by a variety of additional titles depending on how much of the work you are doing yourself and how much responsibility you want to give them. Your cofounder’s role can range anywhere from a large role like Chief Executive Officer (CEO) to a smaller role like Sales Lead. Although the following describes common aspects of the non-technical cofounder role, the role is best defined by acting as the complement to the skillsets you possess.
Although the non-technical cofounder’s role is generally boiled down to business, their job is usually to oversee everything that is not part of development. It can vary heavily from one day to the next depending on what tasks need to be completed.
On small startup teams the non-technical cofounder has to wear many hats including sales, marketing, finances, communications, customer service, and more. They have to be broadly competent in all of these areas in order for the startup to grow efficiently. As the company scales and the team grows, the non-technical cofounder can be more of a manager and decision-maker that delegates these operational duties to specialized employees.
Overall, the non-technical cofounder’s job should more so boil down to FSO (figure stuff out). They need be able to address problems quickly, find ways to run business operations more efficiently, and do it all at the lowest cost possible.
One of the main reasons for bringing in a non-technical cofounder is their ability to communicate within the organization and with external stakeholders; they also act as the main link between the two. Although they don’t play a large role in programming your software, non-technical cofounders are often responsible for organizing a large amount of customer research, sales, and validation by actually talking to the customers and assessing their pain points. This information is then communicated to you and the development team to help inform decisions on future roadmaps and features. It is critical that non-technical founders allow the market to dictate what the problem is and what solution they want.
You and the non-technical cofounder work closely together to establish the company’s culture and vision. This includes development standards, business practises, the team dynamic, and more. The vision is then communicated to your respective teams so that business and development employees are on the same page; they should feel why you are passionate about the problem being solved.
The non-technical cofounder must be able to lead a team with members from multiple areas of expertise in a way that remains efficient and low-cost. Their broad business knowledge and experience should allow them to communicate and monitor progress on all business matters. This experience also provides useful connections to other members of the industry, possible funding sources, and potential customers. With their people skills, a non-technical cofounder continues to build these relationships over time.
Key takeaway: Non-technical cofounders can always provide value in business development, especially when you don’t have adequate business skills yourself, you just want to focus on development, or you want to get off the ground quickly.
If you search “should I find a sales and marketing cofounder” on Google, the results will include many articles detailing success stories about how a lone developer found their way to success without one; they then imply that this means you don’t need one as well.
Yes, it is true that you may not need a business-minded non-technical cofounder in order for your business to flourish, but it is definitely worth examining whether the skill sets they bring can be of value to you; no matter how talented you are, having someone else on board always makes things easier. You’ll need to build a team at some point in the future anyway,
There are several considerations to keep in mind that give you a better idea of how valuable a non-technical cofounder would be to you:
Whether you can find someone you trust or not, you will need some business development guidance if you don’t have the necessary knowledge to lead the team yourself. Business skills can be learned, but it requires a lot of time and effort to do so and likely will be unable to match that of a refined expert. Although a part-time advisor can assist in these areas, a non-technical cofounder brings full commitment to your business’ vision right from the outset and is available for constant communication as the business grows.
Being such a versatile role, there is a broad range of responsibilities you’d have to balance with software development if you didn’t have a sales and marketing cofounder. This includes sales, marketing, strategizing, and raising capital. One way to assess whether you have the adequate skills to get the business started yourself is by trying to sell an MVP (minimum viable product) of your product. Even with no sales background, you could stay afloat while bootstrapping early on if you are able to find customers willing to pay for your product.
If you have trouble selling your MVP or getting traction, a non-technical cofounder may be able to help diagnose the issue and turn things around; they could suggest a pivot, forge the right relationships, identify different markets, or find another solution.
When determining whether you can lead the team on your own, be mindful of whether you have the leadership and communication skills to manage the whole organization; or whether you would be comfortable being the lone face of the company when pitching to investors or customers.
Investors are looking for a well-rounded team with both technical and business competencies. Having someone who demonstrates passion and is a confident and strong public speaker can make a big difference in negotiations and pitches. Usually, the original founder will have the most passion and makes a good sales person early on, but will often find it next to impossible to manage everything that has to be done. Also, investors are most often interested in funding growth, rather than software development; growth comes from good sales and marketing activity.
A non-technical cofounder is also valuable when you don’t have prior experience with a startup or in the industry you hope to enter. They can bring insight and connections to help guide your decisions when you start the business.
Even if you have the capability to lead the business yourself, that can get time consuming when it coincides with leading development. You may want to focus all of your time and effort and creating a good product while someone else is in charge of getting it to people. Only you can gauge how time-consuming each aspect of running your startup will be, so make sure you aren’t stretching yourself too thin when you don’t need to.
Not only can a non-technical cofounder relieve you of these heavy time constraints, but they provide you with a partner to grow your ideas with. This can maximize your performance in your main area of focus, development, since they can give you more insight into the non-technical user’s viewpoint and push back on ideas that aren’t working.
You can also inform your choice by considering your goals for the startup. For the most part, this refers to how quickly you want the business to grow and start generating revenue. Managing the business without a cofounder is definitely possible but will lead to much slower development of both the business and software; having someone to handle business operations while you streamline programming should definitely be a priority if your product needs to get to customers quickly and frequently.
In general, a non-technical cofounder is always a valuable team member if you are willing to share your business with them. The value they bring, and whether you need them, obviously depends on you and the cofounder. You may need to meet a lot of cofounders to find one that fits your team and is willing to join. Thus, the first step in finding a cofounder is figuring out where to find them.
Key takeaway: Beyond your current network, there are a variety of events, cofounding websites, and social media platforms that can be used to find a cofounder. Just talk to as many people as possible!
Here you are. An eligible startup bachelor or bachelorette on the hunt for the cofounder of your dreams. You’ve decided that you’re in need of help to make your dream a reality. Your idea is fantastic, so it shouldn’t be hard to find someone who wants to get on board; as the saying goes, there are plenty of fish in the sea.
But where is this metaphorical sea? And how deep do you have to go to find the business developing fish?
Though this search will likely involve venturing to many settings unfamiliar to you, the most obvious place to find a cofounder is right in front of you; they can be found in your existing network. This could include trusted friends, former classmates, or reputable coworkers. You’ve likely discussed your grand ideas over lunch in the breakroom before, so there’s no harm in taking a hard look at those that you know best to determine if they are suitable to be your cofounder.
With trust being such a key factor in forming a cofounding relationship, starting a venture with someone you already know eliminates much of the uncertainty around whether you will be able to work together or communicate effectively. You are likely already familiar with their past work and can quickly vet out that step-cousin that’s run twelve failed startups. Even if no one in your network is interested, you can ask your network for referrals to someone they know who is trustworthy and interested.
This method does, however bear the risk of tainting an important personal relationship if the business goes sour; many see cofounding with family members as a very risky decision as a result.
Although this is one of the most ideal situations for finding a cofounder, it is also the least likely to come to fruition. If you do have anyone in your network that you would like to start a business with, you probably already knew that before reading this article.
Before you even start searching, spreading the word about your new software solution can be enough to draw in potential cofounders. Going back to the idea of there being many fish in the sea, sometimes you just need to have bait on your fishing rod and the fish will come to you. By launching an early version of the software yourself or building awareness of it online, someone looking for a startup business opportunity may contact you out of interest themselves!
However, it is often difficult to gain enough exposure to attract many qualified suitors organically. In order to catch the most fish possible, fishers need to go where fish are swimming, get bait that draws them to the hook, and then reel them in. Metaphor aside, you likely need to be proactive and go where potential cofounders are if you want to find one to work with you. This requires a lot of research, especially for someone with no startup business background.
It is easier to build a trusting relationship with someone in person than through a computer screen. Face-to-face meetings can help you gauge their passion for the problem you’re solving and whether you’d get along. By attending events you can get to know potential cofounders much more in-depth and build credibility in the field you’re trying to enter. Assessing whether you could work with someone long-term is much more clear in this setting. There are a wide variety of types of events where cofounding occurs, you just need to find the ones relevant to you in your area.
You can definitely meet like-minded entrepreneurs at events meant for those wishing to build a startup. While workshops and lectures are effective, there are even events that require you to form a team and build a startup together. Startup Weekend, for example, requires entrepreneurial teams to build a startup in a weekend using lean methodology. Local/regional business accelerators or incubators run events where startup leaders can network and share experiences. You can view upcoming events at the Altitude Accelerator here.
Tech events can range from local meetups, where people interested in technology can socialize in a casual setting, to huge conferences, where industry leaders can network and showcase the latest innovations. Either way, events are especially advantageous when they pertain specifically to the industry your business is in. While local meetups come with a lower price tag, they definitely don’t have the established talent that a conference would have.
Cofounder dating is perhaps the most ideal event for this purpose, as everyone in attendance is on a mission to leave with their dream cofounder. It involves giving a pitch of your business and the skills you are looking for to the others in attendance while they advertise their skills to you. Although the most well-known cofounder dating events are run by FounderDating, which was acquired by CoFoundersLab, there are likely similar events being run by other companies near your area.
The best way to gain recognition and exposure at an event is to be the person at the centre of it all. By organizing an event for people in the industry, you can get information about customer pain points, get advice about your idea, and assess industry trends all while searching for your cofounder. Though this would likely require a significant time commitment, one successful event could be all you need to find someone that fits your needs.
The most popular website for meeting a cofounder is CoFoundersLab, boasting a user base of over 400,000 potential cofounders according to their website. Its large user base comes from its acquisition of several competing services including Techcofounder, FounderMatchup, and FounderDating. CoFoundersLab helps you find whatever help you are looking for with your startup, whether that is a cofounder, team members, or advisors.
With a free membership, you are able to post your profile without any screening and search the whole network for your ideal partner. However, this plan only allows you to contact up to 5 cofounders per month. With their paid premium plan, you can contact an unlimited number; other premium features include suggested cofounders, priority in search listings, advanced filtering, and the ability to see who viewed your profile. You also receive perks from partners like Stripe, AWS, HubSpot, and Bench. For a higher price, the website offers access to a virtual incubator and a variety of educational modules
Upon creating your account, you can add information about yourself and what you’re looking for; other users can find you and make connections efficiently by filtering search results.
CoFoundersLab is the current go-to platform for finding a cofounder and gives you access to the largest number of potential candidates available.
Founder2be has a smaller user base, at over 90,000 users, and functions very similarly to CoFoundersLab. The site differentiates itself by advertising its ability to act as a platform for launching your startup and meeting investors. Founder2be accommodates business professionals from all fields including marketing, designers, software developers, and business developers to find people with the skillset you need for your startup team.
They have a premium service that adds additional services on top of the free account at a similar cost to that of CoFoundersLab. Although Founder2be placed an emphasis on finding funding and launching your startup on their platform, strong evidence of businesses doing this successfully could not be found. Therefore, this platform falls short of CoFoundersLab due to their smaller user base.
Much like Founder2be, Founders Nation is a similar platform to CoFoundersLab but with less popularity. It was built to connect people hoping to change the world through innovative technologies. On this website, you can identify as someone looking for a cofounder to join your idea or someone who wants to cofound with others’ ideas.
The platform is very simple, as you can browse through lists of people actively searching for a cofounding opportunity. A number of current users could not be found, but the site claims to establish 600 startups every year and be number two in the world for venture capital funding. It also provides discount perks for users on legal, finance, technology, and marketing consulting from partners. Overall, the site is 100% free but is a much simpler service compared to the others.
AngelList is not specifically meant to introduce you to a cofounder but can be a great place to meet business professionals with interest in working at a startup. The site functions as somewhat of a combination of a social network and a job board, as you can make connections and post job vacancies at your business. There are over 29,000 startups present on AngelList, over 2,000,000 active job candidates, and over 4,400 startups that have hired from the site.
When searching for a cofounder, you just register as a recruiter and post the job opening; you can specify the requirements so applications are limited to those that would be a good fit. You can also search through profiles and use filters to sort through potential cofounders or employees. AngelList is one of the most common places for tech startups to gain exposure to investors as well. It is free to sign up and make a job posting on the site, so it is definitely worth it to do so!
Indeed is currently the world’s leading job posting site with 250 million unique visitors each month and an average of 9.8 new jobs added every second globally, according to their website. The site aggregates postings from job boards across the web into one place. When someone is looking for work, one of the first places they go is likely Indeed.
Posting a “cofounder” opening on this site aligns a lot more with letting the candidates come to you than vice versa. However, this is where you will get the highest amount of exposure to those looking for work. It is free to post a job on Indeed but be wary of the amount of time you will need to spend sorting through the large amount of applicants.
Professionals are putting more time and effort into their social media presence than ever before, and that includes startup business developers. Although websites geared toward finding a cofounder can be very helpful, the largest pool of potential candidates exists on the most popular social media platforms. Finding the right niche on these platforms can really immerse you in the startup communities in your industry and help you find a cofounder.
Over 260 million professionals from around the world log into LinkedIn every month while 40% of those users do so daily. In all likelihood, any of your candidates for a potential cofounder can be found on LinkedIn. To find them, you can either post a job opening or search out users with the skills you require and message them. It may even be possible that you share a common connection who can give you an introduction. Although you may receive more rejection responses on here than on a site meant specifically for cofounding, the pool of talent available on LinkedIn is difficult to ignore.
Reddit is organized into pages based around specific topics; they are deemed “subreddits” and follow the structure “r/…”. On a subreddit, you can sort threads according to the most popular ones and they are sorted according to votes from users. One example of a helpful subreddit is r/cofounder, where users start threads when they are looking for a cofounder and interested users can respond. By starting threads in a variety of relevant subreddits, you can access a wide range of users while spreading awareness of your business.
Finding a cofounder on Twitter would perhaps be the most difficult method if you do not have an existing following on the site. If you do have a significant following, tweeting out your idea and interest in a cofounder can be a quick way to spread the word if that is of interest to you. This is most effective when your following is composed of people in the field you wish to enter business in. You can build up this following by creating content that would be interesting to those in your field; using hashtags you can make sure like-minded people are the ones that see it.
Whether you search for your cofounder through cofounder sites, social media, events, or all of the above, it is important to meet as many people as possible. This can get people talking and build a buzz around your product, which is obviously a good thing! Many entrepreneurs get worried that someone is going to steal their idea when they are spreading it around. However, you should be able to describe the problem you’re solving without giving away your exact solution; in many cases someone else has already thought of your idea anyway. You may also benefit from asking people “who else should I talk to?” after a conversation to continue growing your network. The key here is finding the right person to execute your idea successfully before anyone else can.
Key takeaway: Always value their shared passion and reliability, while also making sure your cofounder has experience with business development, your industry, and interpersonal communication. You can assess them by exploring their previous work and spending time getting to know them and their expectations.
With the challenges involved in finding a cofounder, you may be tempted to team up with one of the first qualified candidates who is willing to join you. However, cofounding with the wrong person can lead to disaster later on in development, whether that is because of conflicting visions or a lack of reliability. Because of this, you need to take a long, hard look at everyone you consider having as a technical cofounder.
Of all the traits that will be discussed, the most important thing is that your cofounder complements your existing role and skillset; you don’t need to go searching for advanced skills if they won’t need to use them. Whatever you’re looking for you need to perform due diligence to confirm a candidate indeed has the skills you’re looking for. Many potential non-technical cofounders say “I’ll handle the business side” without truly realizing what that entails. Although having experience at an impressive school or company looks good on a résumé, be sure to look beyond that for actual evidence of their supposed skills.
Even if a candidate seems to have all the skills and knowledge you’re looking for, it can still not be the right fit. If your cofounder does not share your passion for solving the problems your business is trying to address, it’s unlikely they will remain interested as the business grows over time. You need to ensure that your cofounder has aligned long-term visions of both how the product will evolve over time and how a business should be run. This way, you can count on them to invest years of their career and significant personal resources into growing the business with you.
Most importantly, you need to be sure that your cofounder is a reliable partner that you can trust. This may be inherent if you’ve known them for a long time, but cofounding with someone you just met is risky if you haven’t taken the steps to ensure they are committed to your business in the long-run; assessing this trait goes much beyond making sure they seem nice in person.
Forming interpersonal relationships is integral to getting the word out about your startup. Sales skills rely on the ability to hold a conversation, make presentations confidently, answer questions well, make trusted connections with users, prospects, and investors. Being able to convince people to use your product is paramount to getting your first batch of customers, so you need a cofounder that knows where to find them and how to get them on board. If they can convince you to give them part of the company, that bodes well for a potential partner’s sales ability, confidence, and passion.
The ability to network also plays a significant role in gaining a foothold in your industry. Having a cofounder with both existing industry connections and the ability to create new ones is a huge advantage when hunting for investors or new customers. This will also make it easier to build awareness of your product and get advice from others in the space.
Leadership and management skills may or may not be necessary in a cofounder depending on how much of a leadership role you want to give them. For the most part, the sales and marketing cofounder acts as the face of the product when conducting pitches and needs to have an energetic, personable presence during those presentations. They also need to have the organizational and motivational skills to lead your business team.
Although your cofounder likely doesn’t need to be an expert in any one area of business, as specific experts can be hired later on, they need to have the business knowledge and experience to confidently manage the broad business components involved in developing a startup. This knowledge involves knowing how businesses work in your startup’s particular legal and economic environment. Having experience building a startup is much different from experience at an enterprise business; both are valuable but in your earlier stages you’ll want to work with someone who has been through the struggles of a startup before.
Knowing how to market your product is part of having startup experience. It is valuable to have brought a product to market before, whether at a startup or as part of a large enterprise, and have created marketing strategies that reached a large amount of people. Cofounders should be familiar with commonly-used marketing techniques and tools; having new and innovative ideas for marketing is a huge bonus.
The most common struggle startups face early on is financing their business. Having a cofounder with accounting or finance experience is definitely an asset when navigating the fragile budget of a new startup. It is also ideal for them to have experience raising funding, either by applying for grants or pitching to investors. Cofounders can additionally show their passion for your project by being willing to invest capital in the project themselves.
Having experience in the industry of this new venture is valuable in that the cofounder already has a sense of customer pain points, where the demand is, and how the market is commonly entered. As already stated, having connections can pay dividends when looking for early adopters. Being in the industry already is also a sign that the candidate has an inherent interest in the problem your business is trying to solve. One thing to be cautious of is that people working in an industry often have become very familiar with the traditional practises of that field; this can make it difficult to be innovative.
Despite their lack of heavy involvement in development, a non-technical cofounder should obviously have enough technical knowledge to be able to discuss the product and have a general sense of how it is made; investors can see right through a faker pretty quickly. This also makes it easier to communicate user feedback to you and the software development team. In general, it is quite difficult to sell a product without knowing exactly what you’re talking about.
You may not have the business acumen to identify whether a candidate’s skills are the right fit for your project. If that is the case, getting the opinion of an expert in the field would greatly help your recruiting process. They could sit in on interviews, help sort resumes, or judge the quality of past work.
Many developers have their résumé or some of their previous work posted online, which could definitely help their case if they’ve developed a similar startup business in the past. You could even ask people who have worked with them if they would recommend them as a cofounder.
Even if a candidate went to Harvard business school or did some work for Apple last year, that does not mean they will serve you better than someone who genuinely cares about the problem you’re solving. Your cofounder obviously needs to be qualified for the position, but be sure not to hand it off to someone that views your business as a résumé-builder rather than a passion project.
It is a completely different experience working with someone in person rather than online. Depending what kind of working dynamic you plan to have, you will want to make sure you are able to work with the candidate in that setting. This could mean going out to dinner to ensure you enjoy being around each other or giving them a small task online to test their reliability.
Above all, have a conversation about each other’s expectations with regards to working conditions, business operations, performance, and anything that you think needs to be aligned with your cofounder. Making sure everyone is on the same page before starting the business is the best way to avoid conflict later on and always be working toward the same goals.
Key takeaway: Showcase the traits that you would look for in a cofounder, make it clear why your business will succeed, and work together to see if they are a fit. Most importantly ignite their passion for solving the problem your business addresses.
When connecting with potential cofounders, you should approach the interaction with the same mindset you have when assessing candidates; think about your answer to the question “why would I want to work with you?” Though you may find several candidates that are eager to work at your startup, convincing a highly-qualified candidate you’ve identified to join your startup can be a tough task.
Realistically, your cofounder is joining your business to share in its future success and work towards a nice payoff if things go well. You need to show them that that is a real possibility. Finding a cofounder is often viewed as earning a cofounder, since the process involves just as much proving yourself as it does recruiting.
As much as a candidate would want to work at a business they are passionate about, working with a trusted cofounder is just as important. They will look for many of the same qualities you look for in them: trust, commitment, passion, and the required skills. It is your job to make it clear what your value is and why they should want to work with you; there is no chance they will work at a startup with an unconfident developer no matter how amazing the idea is.
Technical skills are obviously the main criteria they will be looking for, but simply saying “I’ll handle this programming side” is not enough. Have documentation of your previous work as a software developer that will showcase why you have the ability to create and grow your product. Being an expert in relevant languages or having a broad base of coding knowledge are a good start, but having previously made a useful app is the best way to illustrate your potential.
Other assets to present include your communication skills, your willingness to take risks, or valuable connections you have in the industry. Anything that makes you seem like the person required for this business to succeed is a useful piece of information in this interaction.
No one wants to join a business that seems destined to fail, especially when it will require a lot of their time and money. You need to show potential cofounders why the business is sure to succeed and what you’ve already done to get it started on that path. This involves being able to clearly articulate the business value proposition.
Using your knowledge of the industry, you need to illustrate the problem that customers are facing and how your business will solve it. It is especially encouraging when you have already created an MVP or an early version of the actual product, along with a vision of what the business could grow into.
Other ways to display your hard work include raising funding, building a development team, quitting your day job, or investing your own money into the project. Showing how much you’ve committed so far is the best way to show that you will remain committed to the business moving forward.
In addition to an idea, you need to come with validation that people want the idea. Feedback or revenue from the MVP is the best way to do this but there are several ways to quantify interest. Customer conversations, market research, or usage data from the software all add credibility to your idea.
Having already launched the product and gained some traction are also sure ways to grab the attention of a potential cofounder. Even if the only users so far are people you know, having user data and feedback is an encouraging starting point to getting the business of the ground.
If someone is going to join you as a non-technical cofounder, they don’t want to just be treated like a sales rep with a fancy job title. You need to emphasize how they are the perfect fit for making the startup a success.
Ideally this person is the perfect fit for your business, so you just need to draw upon what you know about their skills and interests to illustrate why they coincide with the business you’re developing. Much like recruiting, this may require input from an external expert.
If the candidate isn’t actually a perfect fit for the business, you don’t need to lie or change your plans to get them on board; that’s a waste of both of your time. However, it’s still unlikely you’ll find the perfect person that “checks every box” for you, so prioritize what matters most and be prepared to compromise.
It can help to treat the initial interaction as a request for advice with your product; that both strokes their ego and gets them into a conversation about your business. It also shows your desire to grow the business in an informed way. The most important gauge for finding a fit is passion, since the partnership is unlikely to end in success if you don’t share a passion for solving the problem your business addresses.
Key takeaway: Assess how much each cofounder has contributed to the business’ progress and the role they will be playing. Distribute equity accordingly or pay them a salary if you can afford it, though original cofounders will generally get equity. Equity should be distributed through proper shareholders agreements
There are a variety of ways a non-technical cofounder can be compensated by your organization. This can include equity, salary, bartered services, bonuses or a combination. In order to decide what compensation is right for you, you need to establish what kind of role they will have at the startup.
When a non-technical cofounder joins your organization, it is not always clear how they fit in. This role usually depends heavily on what stage the business is at when they join.
If you’re still in the early ideation or validation stages of building your business, a non-technical cofounder would likely be viewed as an original cofounder from the start. If your business is at a later post-MVP or post-revenue stage, your technical cofounder would take on more of a hired CEO type of position.
These two situations may seem to have very similar roles in business development but have contributed different amounts of value to the growth of the business. It is important to assess how much of the business’ current progress and/or success can be attributed to each cofounder; then compensation can be determined.
Both a technical and non-technical cofounder add value to the business. If both are present from the start, it is likely that they have contributed equally to the company’s progress. Splitting responsibilities into business and technology “sides” can be very harmful early on, as communication and cooperation between the two factions is integral to developing the best product possible.
Cofounders will generally work for equity when they are completely committed to the long-term success of the business, much like you are. The amount of equity varies greatly depending on their contributions; an original cofounder from the start can hold anywhere from 30%-60% in equity while a paid CTO that joins later on could hold 1%-10%. These are just common values for compensation of these roles; cofounding situations are always unique and you will need to negotiate these yourself. Just remember, equity is a very expensive form of compensation, should you be successful in the future.
Contributions that earn more equity include creating the MVP, acquiring customers, securing funding, or contributing one’s own money. A tool like the Co-Founder Equity Split calculator at https://cofounders.gust.com/ provides an objective way to determine fair compensation for your cofounder.
If your cofounder is not part of the original founding team of the business, they will likely need to buy or be given shares of the company. This can be done through share options, contracts that entitle employees to buy or sell shares by a specific date. A vesting period is set that defines how long it takes for the cofounder to own the shares unconditionally; this allows the company to buy the shares back if the cofounder ends their employment before the vesting period ends.
Vesting periods can be time-based, where shares are earned over a specified time period; or milestone-based, where shares are earned when the cofounder completes specified milestones such as programming the MVP or hiring a development team. It’s always more preferable to have a milestone-based agreement to keep them accountable for their work; time-based agreements can be abused and leave you on the hook if your cofounder isn’t productive.
With commitment in mind, it would be wise to create a Shareholders’ Agreement when handing off equity to a cofounder. By getting this done ahead of time, ideally with the help of a corporate lawyer, expectations can be set from the start and detrimental future conflicts can be avoided.
Hiring a sales and marketing cofounder or CEO/COO for salary can be very expensive for startups. Because of this, most will wait until the business is making significant revenue to bring in a paid business lead. According to Glassdoor, Canadian cofounders make an average of $60k annually, though those at a startup may fall closer to $46k or lower.
On a startup budget, this can be difficult to afford. You may be able to get the cofounder to work for less salary if you offer them equity, though those searching for a salary will likely already have a specific value in mind. Salaried workers can also be enticed by share options with the company. Another option is to hire an advisor or consultant that will give you business development advice on a part-time basis; this gives you assistance at a more reasonable cost without the commitment of partnering.
Other options for compensation include bartered services, in which two parties exchange services or goods without exchanging money; or bonuses, extra compensation dependent on an employee reaching a specified achievement.
Those seeking a salary could potentially not be as motivated to put in the time and effort required at a startup, as they could just be working for the pay. The same could be said for a cofounder who works part-time alongside another job, as most of their effort could go towards the job that gets them more money.
In general, it is ideal to be compensating cofounders based on reaching milestones or specific progress measurements rather than time; this encourages efficient, timely work. When negotiating compensation that is a combination of salary with equity, those two values should have an inverse relationship.
Most early startups can’t afford for founders to take a salary, so most are just paid in equity as a result. Attracting a cofounder to work for no pay obviously takes far more convincing, but a cofounder willing to take equity is more likely to be passionate about the business and committed to its long-term success. That is not to say that a salaried cofounder is sure to leave you in the dust, but startups with a small budget should be reminded that they can succeed with the right cofounder.
Being patient in this search is of utmost importance. If you can’t find anyone that seems like a good fit, then you just need to keep searching until you do. Working with the wrong person, whether they’re lazy, unqualified, entitled, or just hard to work with, can be a huge waste of time and money. Wait for a cofounder that shares your passion and can commit to your startup long-term.
With that said, that’s no reason to delay starting your business while you search. There is always work to be done at a startup that doesn’t require business experience; you could even get your MVP developed and get started on sales. Remember, the more work you’ve put into your business, the more enticing it will be to potential cofounders.
If you’ve been searching for a cofounder for months on end without any success, it may be time to reassess how you are presenting yourself and your business. If no one trusts you as a partner, a customer won’t be able to either. If customer interest in your idea has been validated, the issue likely lies in how you’re presenting the opportunity.
This should not cause you to shy away from beginning development of your product. There are several ways to develop your software, so it may be time to start looking for an alternative. It’s possible that someone helping you with development, like a talented freelancer or a technical advisor, could grow into a cofounder role over time. To reiterate, patience is key but there’s always something to do in the meantime.