“Do you remember when we first met?” I said to “Ray,” the solo founder and CEO of a startup that I’ve been advising for over three years.
“Yes,” Ray said. It was in that park where we went for a walk where we saw all those deer.”
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“There’s an evacuation notice there because of all the fires (in California),” I said.
“Really,” Ray said. “I didn’t realize it was that bad where you are.” The he transitioned, “I want to update you on our fundraising,” Ray said. I’ll get back to that later.
I was introduced to Ray by a mutual friend over three years ago. At the time, Ray hadn’t even started his company; it was just an idea.
However, I was intrigued by the elegance of his idea. If Ray was successful, he had the ability to disrupt a huge, multi-billion dollar market, so I agreed to advise Ray.
You can start out as a solo founder, but you’re going to need a team.
However, I was concerned because there were no other co-founders, it was just Ray. So, I asked Ray why he didn’t have any co-founders.
Ray said, “I wanted to found the company with ‘Bill (as his CTO),’ and Bill wanted to join the company. But Bill’s wife was nervous about him quitting (his existing job), so we agreed he would join the company after the funding closed.”
That made me feel a little better about Ray’s chances. It also made me feel better that Ray was a technical genius. As I said, Ray’s concept is truly elegant.
So, be open to finding co-founders to work with if you find the right person.
In fact, part of the reason Ray wanted to meet with me was to talk with me about joining the company as CEO. That was another good sign, not because I wanted to be CEO (I felt that Ray was the right person for that job), but it demonstrated Ray’s openness to adding other people.
Six months later, Ray was raising his initial funding. There were still no co-founders.
Some investors passed because they felt Ray wasn’t far enough along yet. However, Ray attracted enough interest that he was able to close his initial funding as a solo founder.
There was a catch before Ray’s investors would wire him the funding. The investors wanted a signed offer from a VP Engineering candidate that Ray was ready to hire.
In addition, the investors dictated the terms of the offer. It was significantly higher than the market rate for salary and equity.
Needless to say, Ray was not happy, but what choice did he have? After some soul-searching, Ray bit the bullet and agreed to the investors terms. If, for whatever reason, the prospective VP Engineering backed out, Ray’s company would be over almost before it started.
You can only go it alone for so long.
Fortunately, the VP Engineering joined the company. Now, Ray just closed a $50 million round of funding at a $250 million pre money valuation. The company is in great shape to win and win big.
That’s why Ray was calling me. He’d come a long way from our first meeting, and that walk in the park with the deer.
Don’t let your greed get in the way of building a billion dollar company.
There’s a reason Ray, as a solo founder, was able to succeed.
Ray was willing to have a co-founder, but circumstances didn’t allow that to happen. My point is simply if your goal is keeping more of the equity for yourself instead of bringing on a great co-founder, then you are headed for failure.
Everything in a startup begins with you the CEO. If you are all about greed, then the company, and the team that you hire, will be all about greed.
Don’t tell the story that, “I’l change once I found the company.” Sorry, I’m not buying that garbage. You’re not going to change. Instead, make prudent decisions from the start of your company. If that means you add a cofounder, then so be it.