Tuesday, May 10, 2011

The co-founder marriage counselor?

We all get in arguments. It could be with your parents, your brother or sister, your spouse or girlfriend/boyfriend. Some thing we can sort out, and it's great because it usually makes us stronger. Unfortunately, we can't always sort things out and in a case of marriage it sometimes ends in divorce.

But what happens when the argument is between business partners or co-founders and you can't figure out how to make it work. I came across this video about how Mark Suster, a VC and entrepreneur, who mentions that he is a marriage counselor (obviously tongue-in-cheek) for co-founders. He talks about co-founder situations in a recent blog article called The Co-Founder Mythology. Check it out:

Two points in his blog really stick out for me about selecting your co-founder, and I'll reprint here:
  • I say, “go ahead & take the leap” if you want to start a company (many people don’t want to – that’s OK, too.). Hire your co-founder. Give them a large sum of equity. 20%. 30%. Even 40%. Vested over 4 years. If you ever fall out of love you have a pre-nuptial agreement. I talk about that in more detail here.
  • Truly treat them like a co-founder. Give them access to all confidential information. Involve them in fund raising, hiring, strategy, etc. Publicly call them a co-founder. Don’t rule like a dictator. But … if you have very big disagreements about funding, risk levels (e.g. like how much burn rate), whether to sell the company, etc. you won’t be backed into a corner or unable to make tough decisions.

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