I read a lot these days about the importance of having both a hacker and a hustler as founding partners if you plan to raise capital and successfully launch a tech-related start-up. A hacker is basically someone who can write software and a hustler is a passion sharer (think Steve Jobs).
But what if you’re a hacker and don’t know any hustlers or vice versa? How do you make the connection you need to find viable founding partners to bring your idea to life? Do you go with someone you’ve known since kindergarten? This option is ideal, but probably unrealistic for most entrepreneurs. Do you rely on character references from other people you trust? Or do you use one of the new founder match-making services that are proliferating?
You Can Trust John. He’d Be a Great Partner For You!
If someone you trust suggests a person to you for whom they vouch, this can either be really great, or completely blow up in your face. In my case, the latter occurred.
I am a hustler and am working on a start-up, WeMontage, that allows professional photographers and interior designers to upload their client pictures, create a collage, and print them on large format wallpaper (yes, real wallpaper!). I came up with the idea, generated the business model using the Business Model Canvas, and created all the financial projections. But I don’t know jack about technology and desperately needed a partner who could either develop the software, or had technology relationships and could project manage a team of designers and developers.
Image via WeMontage.com
A dear friend recommended someone (let’s call him Bill) who had developer relationships and could project manage things. Bill and I talked for about a month then finally agreed upon an appropriate equity percentage for him since he was not committing any capital to the project.
KABOOM! Nine months later this relationship blew up in my face after Bill encountered a few “life challenges” and completely checked out of WeMontage. Now I’m trying to cut a deal with him, outside of the buy-sell agreement we signed, to buy him out of my business. Sucks, doesn’t it?!
I Trust You, But Let’s Take it Slow…
A good friend of mine, Mark DesJardin, started a website (GroupRide(dot)Me) for cycling enthusiasts to find other comparably skilled cyclists for group rides. Like me, Mark is a hustler and he already had someone developing an app for him that will allow users to find group rides. But he needed a founding partner with cachet in the cycling industry and money to invest in the start-up.
Image via GroupRide.me
Luckily for Mark, one such person lives in his local community (let’s call him Joe). Mark met Joe at various cycling-related events and Joe immediately thought Mark’s idea was desperately needed nationally. Mark asked a mutual friend about doing business with Joe and Joe received two thumbs up. Over the next six months, Mark and Joe got to know each other on rides and by co-hosting cycling-related volunteer events like a helmet fitting program and bike safety checks.
BAM! The two decided they complemented each other and now Mark has a credible founding partner with industry relationships and who will invest money in the business.
Founder Match-Making
I recently discovered two web sites that aspire to connect hackers and hustlers:
Here is an excerpt from their site:
“Recognizing that the “entrepreneurial match-making” websites fell far short of what is needed… It’s our goal to not just tell people “Here Is Someone You May Know…” but instead provide “Here Is Someone You SHOULD Know.”
Here’s an excerpt from their site:
“FounderDating is a network of talented entrepreneurs with different backgrounds and skill sets all ready to start their next company or project…We help you find cofounders with complementary skill sets.“
I haven’t used these match-making services, but I would caution patience. After all, most of us wouldn’t propose to our boyfriend or girlfriend after dating for a week, right? Well, I did propose to my lovely wife after 6 months and we’re still going strong after 7 years. But that’s another story. ;)
Rules For Founder Teams and Agreements
I also discovered a blog by Simeon Simeonov, at which he talks about proper ways to structure founder start-up agreements. I wish I’d read this a year ago! Simeon has an interesting post If you want to build a better-balanced founding team where no one founder is irreplaceable.
Bottom Line
Choosing founding partners in your start-up is almost as important as choosing your spouse. So, be patient and choose wisely.
Have you had successes or failures finding a viable founding partner for your start-up? I would love to hear about it in the comments section!
Latest posts by James Oliver, Jr. (see all)
- Entrepreneurs Must Have a Supportive Spouse if Launching a Startup - February 23, 2013
- Startups Don’t Fail. Founders Quit. - January 23, 2013
- How Not Having A Tech Co-Founder Put Me On The Bubble For A Start-Up Accelerator - January 9, 2013
The first thing I'll say is to work out all the potential scenarios up front. It doesn't matter how much you like the person with whom you're starting a venture, how long you've known each other, and how well you work together on non-business-related things. As soon as money is involved, it gets complicated and stressful. This is standard business advice and I cannot state its importance strongly enough!!!
Secondly, if you get into a business relationship with someone, be sure you are able to talk openly with one another without fear of insult or guilt trips. The ONLY way it's going to work is to be able to openly express hopes and aspirations, as well as concerns, without fear of repercussions of any sort.
Thirdly – congratulations, James, on your pending fatherhood!
Kinda like a marriage, right?! Thanks, Susan.
Well said Sue! Open and honest is the best way to go but even with that there are bound to be bumps in the road.
This is a great post, James. There are so many factors to consider when starting any kind of partnership and it is very difficult to discern 1) level of trust, 2) compatibility, and 3) goals of each partner. Often, one partner wants to simply use the resources of the other without really bringing anything to the table. But, it difficult to find that out before it is too late.
So right, Chuck. Thanks for commenting. My favorite part of the post is the title pic of the two kids-outstanding!
I love that pic too James! Right when I saw that pic I said to myself "Hell yeah this is going to be good!"
A good read James, insightful!
Appreciate it, buddy!
Ouch!!! Been there. Done that. There is actually a debate around this issue of giving equity to help build your startup without them investing cash. Now when I hear of someone considering this, I drop whatever I am doing to talk them out it. There is a different mindset when investing capital. Life will always "just happen" and there will always be pitfalls. Having skin in the game ensures each founder gives their all during those times. It is also an acid test. If you want significant equity in my business but are not willing to put up cash, move along.
Nice job on this much needed post!
Haha! Awesome comment. In the end, he did add substantial value (lucky for me).
Wish I had seen your post before I launched my own collective, James. I'd "still" have launched, of course, but I probably would have planned it out so not quite so much of the initial outlay and hard work landed on only one set of shoulders! Wonderful post, a must read!
Hey, thanks!
Great post James!
Such an unfortunate story for you. Sorry that happened. I bet this happens a lot to entrepreneurs though, would you say?
It's truly all good. If it wasn't for him, I wouldn't have gotten the tech and design piece figured out. Especially since I have champagne taste on a beer budget. Haha!
wow. painful. tough lesson to learn all on your own. your friend mark is lucky to have you around to guide him.
Thanks for the coment, Frank. Hey, what doesn't kill you, makes you stronger, right?!
Thanks, Brian. Lucky you learned that one early.