May 15, 2024

What To Look for in a Startup Co-Founder: Green Flags and Red Flags

Looking for a co-founder to help execute your startup idea? There are a lot of things you should know before you jump into a partnership. Our guide shows you what to look out for when you're seeking a co-founder for your startup, and how to make sure your co-founder is the perfect fit.

What To Look for in a Startup Co-Founder: Green Flags and Red Flags

Are you a founder with an awesome idea—but in need of a co-founder? You’re not alone.

While many startups can succeed with just a solo founder, it’s no secret that some of the most successful tech companies and brands today needed more than one head working together to solve the same problem.

But wait… Do you even need a co-founder?

We strongly advise finding a co-founder, regardless of whether you believe you can grow your business on your own.

After all, having a co-founder comes with its own perks: multiple people invested in solving the same problem, complementary skill sets, shared workload, and a diversity of perspectives on various issues, to name a few.

However, one of the most critical and often underestimated benefits?

Emotional support.

Starting a company is an incredibly challenging journey filled with highs and lows. There will be moments where you might wonder if it’s even worth it to keep going.

At times like these, having your co-founder by your side can help you keep that flame alive. They work as your partner in all of this, and they can make overwhelming challenges feel more manageable and reduce the stress the inevitably comes with startup life.

How do you even find a co-founder for your startup?

While, yes, we’re definitely in the camp of “have a co-founder” versus the alternative, do you want to know a secret?

Finding a co-founder for your startup can be an awful lot like dating.

Think about it: you’re trying to see if you’re looking for the same things, understanding that you’re both different even as you work on some common goals, and you sometimes realize that the two of you just aren’t a great fit.

Our team here at Founders Launchpad have invested and coached solo founders to finding their perfect match, so we know a thing or two about what to look for in a partner who’s all-in for your idea.

This guide will give you the knowledge to navigate your co-founder search, highlighting the green flags that signal a dream partnership and the red flags that scream "run for the hills!"

A pro tip to keep in mind

We’re going to go through all the green flags and red flags to look out for in a co-founder relationship soon, but we’d be remiss if we didn’t mention an important tip first.

Before committing to any potential co-founder and entering into a formal working relationship, we strongly advise working together for even a few weeks to thoroughly gauge all the points we discuss below.

Call it a trial period, sort of how you might go on a few dates with somebody before making it official.

A trial period between potential co-founders can reveal a lot about their work ethic, commitment, and compatibility with your vision.

If a potential co-founder is unwilling to engage in this trial phase, that in itself can be a significant red flag indicating their level of commitment and suitability for the partnership.

Now that that tip’s out of the way, let’s get into the green flags and red flags you should be looking out for in your future co-founder.

Green Flags in a Potential Co-Founder

Complementary Skill Sets

Imagine Steve Jobs without Steve Wozniak—Apple might look very different today. Great co-founders bring diverse strengths to the table.

Are you a visionary with a knack for marketing? Seek out a co-founder with a technical background to build your product.

Or maybe you know you’re best as the technical lead. You’d best do well to find a co-founder who’s business savvy.

Be honest with yourself when evaluating your own skills and identifying ones that are missing and should be brought in by your co-founder.

There’s little to no benefit if all co-founders have the same skillset; you want to be able to cover all major aspects of the business and have someone in the team that has a deep knowledge and interest for each respective field.

It's important to remember that no one will be as invested in your company, its challenges, and its customers as you are. That’s why it's crucial to have at least one co-founder who is responsible for each critical part of your business.

How complementary skills turn into clear roles

Usually—and especially for tech startups—you will see some kind of co-founder mix like:

  • Someone to handle the entire commercial or business side (CEO). This includes handling the finances, sales, marketing, operations, and also fundraising and investor relations.
  • A technical co-founder (CTO). This person is responsible for building the product, leading the development team, and ensuring the technology aligns with business goals.
  • The third can be a more specialized co-founder like a COO or CMO. Depending on the business needs, the third co-founder can focus on operational efficiency and internal processes (COO) or take on the role of driving marketing, branding, and customer engagement (CMO).
  • For some businesses, particularly those dealing with very complex or highly regulated products (BioTech, Aerospace, Pharma, etc.), you might need additional co-founders with specific expertise in areas such as legal and compliance, research and development (R&D), or quality assurance. These roles are essential to navigate the specialized challenges and ensure your business meets industry standards and regulations.

Shared Passion and Values

Enduring long hours, making tough decisions, and navigating inevitable setbacks are all part of the startup rollercoaster journey.

Having a co-founder who shares your deep passion for the business concept and aligns with your core values then becomes one of the biggest assets you’ll ever have in your startup journey.

This shared commitment not only fuels persistence and resilience but also keeps both of you consistently working towards the same goals with a unified vision.

For example, in the early days of Apple, Steve Jobs and Steve Wozniak shared a profound passion for innovating computing. Their aligned vision for user-friendly and beautifully-designed personal computers was pivotal in driving Apple's initial success and overcoming the many obstacles they faced.

Similarly, at Warby Parker, the co-founders shared a common goal of disrupting the traditional eyewear industry and a commitment to social good, which helped them persevere through challenges and scale their business effectively.

When both co-founders are enthusiastic about their mission and adhere to similar values, it significantly enhances the team's cohesion and stability.

This synergy is vital not only for maintaining morale during tough times but also for making consistent, values-driven decisions that shape the future of the company.

Open Communication and Trust

Co-founders need to have open communication and trust at the foundation of their relationship, especially in a high-stakes environment of startups.

You’re going to go through a lot together, so it’s important to feel comfortable discussing anything with your co-founder, whether that’s financial challenges or strategic disagreements—all while knowing they will hear you and support you, and vice versa.

This kind of relationship requires not only speaking openly but also being a good listener. To foster this environment, practice active listening and encourage a culture where giving and receiving honest feedback is valued.

Create regular opportunities for discussions, and make sure they're structured in a way that everyone feels safe to express their thoughts and concerns. This approach not only prevents misunderstandings but also strengthens the trust and bond between co-founders, setting a strong example for the entire organization.

To best gauge whether you and a potential co-founder can maintain open communication and trust, consider engaging in in-depth discussions about past professional experiences and personal values.

Additionally, working together on a small project or problem-solving task can reveal a lot about how you both handle communication under pressure and whether there is mutual respect and transparency in your interactions.

Strong Work Ethic and Resilience

The startup journey is paved with challenges, demanding not just vision but also tenacity and a willingness to tackle problems head-on.

Look for a co-founder who shares your hustle, strong work ethic, and resilience. A co-founder should be someone who isn't afraid to get their hands dirty, who can pivot and persevere through setbacks.

Think of Ben Cohen and Jerry Greenfield of Ben & Jerry’s—they faced initial resistance from skeptical grocery stores, but persevered with their unique ice cream flavors, building what is today a multi-billion dollar brand.

To gauge these qualities in potential co-founders, explore their past entrepreneurial ventures or projects. Ask about the challenges they faced and how they overcame them.

Observing how they describe these experiences can provide insights into their resilience and problem-solving skills. On top of that, discussing hypothetical scenarios or past difficult decisions can help reveal how they might handle future challenges.

Having discussions about these topics not only helps you assess their ability to persevere but also their capacity for creative problem-solving and their dedication to seeing projects through to completion.

Red Flags in a Potential Co-founder

Unequal Commitment

A co-founder that isn't fully invested in your startup idea is a recipe for disaster.

Look for someone who isn’t only excited about your idea but is also ready to dedicate the long hours and hard work required to turn your shared vision into reality. You need that level of alignment to drive the company forward through the many challenges it will face.

To gauge a potential co-founder’s commitment, observe their willingness to invest time and resources into the venture.

Are they prepared to make sacrifices, such as leaving a stable job or investing their own funds Discuss expectations for time commitment and roles early on to ensure there is no ambiguity.

Also, a good indicator of commitment is their proactive behavior—do they bring new ideas to the table, take initiative without being prompted, and show persistence in solving problems

Monitoring these behaviors can help you identify if a potential co-founder might display unequal commitment down the line.

Poor Communication Style

Imagine co-founding a company with someone who struggles to articulate their ideas or shuts down feedback.

You’ll have to be able to effectively communicate with your co-founder, especially about navigating disagreements, making decisions, and building a strong company culture.

A co-founder who can’t communicate effectively will only hinder progress and amplify misunderstandings, which can be detrimental to the health of your startup.

To assess a potential co-founder's communication style, pay attention to how they express their thoughts during discussions and how they handle feedback. Do they listen actively? Are they open to different viewpoints? Can they discuss complex ideas clearly and respectfully?

Observing these behaviors in various settings, such as in one-on-one meetings, group discussions, or during stressful situations, can provide valuable insights into their communication skills and overall suitability as a co-founder.

Poor communication is a significant red flag that can predict future collaboration challenges, making it an essential factor to evaluate early in your discussions.

Unrealistic Expectations

While optimism is essential, a co-founder who has rose-tinted glasses about the challenges ahead can lead to serious problems down the line.

Unrealistic expectations about swift and substantial returns, exponential growth overnight, or an overly smooth scaling process can lead to poor planning, misallocation of resources, and significant disappointment when results don’t align with these lofty ambitions.

Because of this, partner up with someone who has a clear, realistic view of the hurdles you'll face but remains motivated and excited about overcoming them and finding innovative solutions.

To gauge whether a potential co-founder has unrealistic expectations, carefully listen to how they discuss future plans and scenarios. Do they seem to expect meteoric success or substantial financial returns with minimal effort or time?

During your discussions, pose hypothetical challenging situations or potential setbacks and observe their responses. A co-founder grounded in reality will acknowledge the potential for difficulties while maintaining a proactive and resilient approach to navigating them.

This balance between realism and optimism is vital for sustaining a startup through the inevitable ups and downs of business growth.

Dishonesty or Unethical Behavior

Trust is paramount. A co-founder who cuts corners or exhibits unethical behavior can severely jeopardize your company's reputation and future.

To spot potential red flags, observe how they discuss their past experiences and interactions. Do they avoid details, exaggerate successes, or blame others?

Conducting background checks and speaking with their former colleagues can also provide valuable insights into their integrity and ethical standards. It's important to assess these traits early to safeguard your startup's integrity and long-term success.

It’s Not Just Looking for Flags—It’s About Creating a Strong Foundation

Finding a great co-founder is just the first step. Here are some additional tips to solidify your partnership:

Clearly Defined Roles and Responsibilities

It's crucial to discuss and document each co-founder's roles and responsibilities clearly. This helps prevent overlap and ensures that all critical areas of the business are covered.

Clear delineation of duties not only minimizes confusion but also helps in holding each other accountable, which is vital for the efficient operation of your startup.

Open and Honest Communication

Maintain a regular schedule for check-ins to discuss the company's goals, any concerns that may arise, and track progress.

It's important not to let issues fester—address challenges as they come with candid and constructive communication. This ongoing dialogue fosters a strong relationship and can quickly resolve misunderstandings before they escalate.

Formalize the Partnership with a Founders’ Agreement

Starting a company with someone is kind of like entering a marriage; you'll spend most of your week with them, and any separation might involve a complex process.

This is why you need to have solid founder agreements in place from the start. These agreements ensure that both parties have a clear understanding of their roles and responsibilities, helping to prevent conflicts and misunderstandings down the line.

Legal documents like this might seem formal and cold at the beginning, but you’ll find that having this agreement from the beginning can save you from a lot of headache in the future.

The document should outline details like:

  • Ownership Percentages
  • Vesting Schedule and Cliff
  • Capital Contributions
  • Confidentiality and Non-Disclosure
  • Non-Compete and Non-Solicit Clauses
  • Decision-making processes, dispute resolution, and exit strategies for each co-founder.

While it sounds like a lot for something in its early stages, your Founders’ Agreement sets clear expectations and provides a structured approach to resolving disputes, thereby preventing major disagreements and potential legal challenges in the future.

By implementing these strategies, you can build a strong foundation for your partnership and proactively mitigate potential challenges down the line.

Tips to Find Your Perfect Match

Finding the perfect co-founder can be a time-consuming process. Don't get discouraged if you don't click with the first few people you meet.

Here are some strategies to expand your network and increase your chances of finding your ideal partner:

Tap into Your Network

When searching for a co-founder, first make the most of your personal and professional networks.

Talk to friends, family, former colleagues, and mentors about your venture. You might find that someone within your circle is either interested in joining you or can introduce you to potential candidates with the skills and drive you need.

Ideally, it's beneficial if you already know the person beforehand as this gives you a clearer understanding of their capabilities, work ethic, and personality.

However, while family and close friends can seem like natural choices for partnership due to trust and familiarity, proceed with caution. Mixing personal relationships with business can complicate matters, particularly during stressful or challenging times.

If you do go the route of working with friends, maintain professional boundaries and handle business disagreements without it affecting personal relationships negatively.

If considering a close friend or family member, make sure that both your parties can separate personal feelings from business decisions, which is critical for the health and success of your venture.

Attend Startup Events

Industry meetups, conferences, and workshops are a great way to connect with like-minded individuals. Strike up conversations, share your vision, and see if there's a spark.

Leverage Online Platforms

Taking advantage of online platforms can help you expand your search for the ideal co-founder. Connect with aspiring entrepreneurs and potential co-founders on some professional platforms to find individuals with complementary skills and interests.

Platforms like LinkedIn can be extremely useful in your search for a co-founder. You can use LinkedIn to identify potential partners by searching for specific skills or filtering for their experience at relevant companies.

This method allows you to evaluate their professional background and expertise, similar to how you would assess a candidate for a job, ensuring they have the right skills your startup needs.

Focus on Building Relationships

Don't approach every interaction with the sole purpose of finding a co-founder. Build genuine connections with people in the startup ecosystem. The right co-founder might emerge organically from these relationships.

Remember: There's no one-size-fits-all approach to finding a co-founder. Some founders might prioritize technical expertise, while others might value strong marketing skills. The key is to identify the skills and qualities that complement your own and prioritize those factors in your search.

Cultivating a Lifelong Partnership

So you've found your ideal co-founder, congratulations! Now comes the real challenge: building a long-lasting and successful partnership. Here are some key things to keep in mind:

Embrace Shared Decision-Making

Develop a system for making joint decisions. This could involve open discussions, voting in case of a disagreement, or assigning specific areas where each co-founder makes the final call.

Celebrate Successes (and Learn from Failures) Together

Acknowledge and celebrate each other's contributions. When faced with setbacks, analyze the situation together, learn from your mistakes, and move forward as a team.

Maintain a Healthy Work-Life Balance

The startup grind can be intense, but prioritize your well-being and your co-founder's well-being. Schedule time for breaks, vacations, and personal pursuits to avoid burnout.

Continually Invest in Your Partnership

Just like any relationship, your co-founder partnership requires nurturing. Schedule regular check-ins, do co-founder or management team offsites,  participate in team-building activities, and maintain open communication to ensure you're always on the same page.

Remember that a successful co-founder relationship is a two-way street. It requires mutual respect, trust, and a willingness to work together through thick and thin.

Better Together

Finding a co-founder is a pivotal step in your entrepreneurial journey. By prioritizing the green flags, avoiding the red flags, and fostering a strong partnership, you'll increase your chances of building a successful and sustainable startup.

Don’t forget that the road to startup success is paved with challenges, but with the right co-founder by your side, you'll have the support, motivation, and complementary skills to navigate the twists and turns and ultimately achieve your goals.