Instructions for founding – Step 2: The founding team Stefan Zangerle 11. January 2022

Instructions for founding – Step 2: The founding team

Find the founding team (co-founder)
Find the founding team (co-founder)
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In the new series of articles “Instructions for starting a business”, you will learn step-by-step how to found a company, what you have to consider and how you can avoid mistakes at the start of your entrepreneurial career.

further articles in the series:
Step 1 – Find a business idea
Step 2 – The founding team (current)
Step 3 – Validate a business idea
Step 4 – the business model

After a business idea has been found, the next step in the founding process of a company is the decision whether to start as a sole proprietorship or to bring co-founders into the founding team. What are the arguments for or against starting an individual company? How do you find co-founders for a startup idea? Which characteristics should be covered in the founding team? You can find answers to these questions in this article.

Solo entrepreneur

After a business idea has been found, most entrepreneurs will initially start with the implementation of the idea on their own. While some entrepreneurs are looking for partners in the next step, most entrepreneurs prefer to set up a one-to-one and become a solo entrepreneur.

The decision to do so can have many reasons and has both advantages and disadvantages.

benefits

As a solo entrepreneur, you can make all the decisions yourself, you have absolute freedom in your actions and you can decide for yourself in which direction the company should develop. For most founders, this is the epitome of self-employment and one of the main reasons why people opt for self-employment in the first place. You are not accountable to anyone but yourself and you are solely responsible for the success or failure of a company. There are no discussions with co-founders or shareholders, you are very flexible and can react quickly.

disadvantage

However, this independence and freedom come at a price. As a sole proprietor, you bear the entire risk and you have to take care of all areas of the company. A broad set of skills is required and there is no one who can save you from wrong decisions or whom you can simply let off some pressure.

For whom?

A single start-up is therefore suitable for all founders who like to make decisions independently of others anyway and who are good at dealing with pressure. Individual founders love freedom, like to lend a hand and don’t get discouraged that quickly.

Founding team / co-founder

It’s easier together than alone. This applies not only to the establishment of companies, but in particular to the establishment of startups. Due to the high complexity of startups, the workload and the required knowledge, startups are rarely founded on their own.

If you want to found a team, you have to think about how to find co-founders, what a good co-founder needs, how many partners you should look out for and how the shares should be distributed. After all, as an entrepreneur you want to build a successful company, but also want to participate in the profits as much as possible.

How many founders?

One of the most hotly debated issues in this context is the size of the founding team. An evaluation of the best-known and most successful startups has shown that 2.09 is the ideal number of founders . However, many experts and investors are also of the opinion that a company should ideally be founded by 3 people. However, they all agree that there should not be more than 4 founders.

Why?
With 2 people there is usually good trust between the founders and the areas of responsibility are clearly defined. In the best case, a team of two founders consists of a technician who develops the product and a person with a business / sales background who ensures that it is commercially viable.

With a team of three there is even more diversification and a wide range of tasks that the founding team can cover and more can be done.

If there are 4 or more people in the founding team, things slowly get complicated – the first power games arise and efficiency drops because everyone wants to have a say and you may lose sight of the “big picture”.

What skills should the co-founders bring with them?

Of course, that depends a lot on your own strengths and weaknesses, the background and the business idea. It makes sense, of course, to fill the most important areas of the company to be founded with co-founders. Usually these are management & finance, technical development and marketing / sales. So there should definitely be someone who can take over the management, keep an eye on the finances and be in contact with the stakeholders. Most companies also need a technician who can develop the product / service and has an understanding of the company’s line of business. And last but not least, it would be ideal if a founder can bring experience in marketing & sales to be able to generate relevant sales.

In many companies, however, several areas are occupied by one person. That means there are, for example, managing directors who also do marketing or sales or a technician who also takes on the management of the company at the same time. In principle, this is not a problem – it is only important that missing skills and weaknesses are covered relatively quickly by other people.

In principle, this can also be a first employee. However, one must then be careful that in the event of a possible termination, there is no too great a knowledge gap and the company is unable to act.

Another approach to the skills of the founding team can also be found in the literature. It is suggested that a founding team should ideally consist of a visionary, a hacker, and a hustler. In some sources, however, the visionary is also replaced by the hipster and there are different definitions, but roughly these types of founders can be summarized as follows:

The visionary

The visionary is the team’s strategist, thinks long-term, sets the vision and is responsible for selling the dream of the idea – whether to co-founders, applicants, investors or sales partners. He convinces others of the company, is often the managing director, attaches little importance to details and above all wants to expand and scale. The visionary always sees opportunities and positive developments and nothing can dissuade him from his dream.

The hacker

The hacker is the genius in the team. He focuses on the product and knows how to implement other people’s ideas. He is a master of his subject and an expert in his field. Regardless of whether you are a programmer, researcher or craftsman – he is familiar with all the tasks required to achieve his goals and the company stands and falls with him and his expertise.

The hustler

The hustler tackles things. There is nothing that he cannot or nothing he cannot learn. He is responsible for breaking down the visionary’s vision into smaller steps and making sure that everyone in the company is going in the right direction. He has a wide range of knowledge and is a real all-rounder. The hustler takes care of all daily tasks and everything else that arises.

The hipster

The hipster has an eye for detail and can put himself in the shoes of customers. He is the creative head in the team and always has new, promising ideas with which he can inspire customers. Often his background is in marketing or graphic design.

If a founding team has all of these types, it creates a very good basis for founding a company.

Start-up types - hackers, hipsters, hustlers, visionairy
Start-up types – hackers, hipsters, hustlers, visionairy
(c) https://startupanz.com/two-laws-building-products/

What else is important:

Choosing a co-founder is often compared to entering into a marriage. In the next few years you will spend a lot of time together, you have to trust each other and be able to rely on your partner (s). In addition, it is particularly important that you always communicate openly with one another and respect one another. In addition, you should pay attention to the most diverse founding team possible, so that a particularly large number of ways of thinking and perspectives can flow into the company.

How do I find co-founders for my startup or my company?

Many founders ask themselves this question – and rightly so. Because it is not that easy to find really suitable co-founders. But there are several ways you can find co-founders.

Friends family

Friends & family are often the first point of reference when looking for co-founders. You have a lot of trust and respect for each other and you know that you get on well with each other. You know each other’s weaknesses and strengths – in other words, ideal conditions for finding co-founders. Indeed, many founders are siblings or good friends. However, one has to clearly separate professionally and privately, otherwise conflicts can quickly arise.

Network / professional contacts

The personal network and contacts that you have got to know in the course of your previous professional life are ideal for finding co-founders. You know the working methods and expertise of the other person, you get on well, but the personal relationship is not too deep.

LinkedIn

In this breath, LinkedIn should also be mentioned. In recent years, LinkedIn has become the most relevant professional network. It’s incredibly easy to search for people with certain expertise via LinkedIn and you can write to them quickly. If you’re looking for an expert in a field to co-found, LinkedIn is the place to go. But be careful: you shouldn’t overdo it or send mass inquiries, otherwise you will quickly lose credibility.

Online networks

In recent years, numerous online networks for matching founders have been established. Both founders with an idea and ambitious talents cavort on these platforms. For example, I found one of my co-founders at Flaterio through Founderio .

Other networks:

https://angel.co/
https://www.startus.cc/
https://www.facebook.com/meet.your.cofounder
https://www.gruenderszene.de/jobboerse/stellenangebote/suche-co-founder

Job listing

An interesting option and one that has recently become more popular is placing a job advertisement. You can clearly communicate what you are looking for and in the best case you will receive many applications from different people with different levels of experience. On the job platform of the Austrian startup magazine derBrutkasten , for example, we were able to find our 3rd co-founder at Flaterio with a free ad. (Update August 2021: For some time now, startups have not been able to place free advertisements on the incubator job platform – prices start from 69 EUR but are still cheaper than on other job platforms).

Other job platforms:

https://www.karriere.at/
https : //at.indeed.com/
https://www.stepstone.at/

Conclusion

You have to decide for yourself whether you prefer to found a company alone or in a team – both have advantages and disadvantages. There are also many things that you should consider when looking for co-founders and some constellations of founder types are considered to be particularly promising. While it is difficult to find really good co-founders, there are still a few ways to find the right co-founders.

In the next article in the “Guide to Starting Up” you will learn how to validate a business idea.

go to step 3 – validate a business idea

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