Do I Need a Cofounder?

Venture capitalists tend to look unfavorably on single founders, partly due to the opinion of Y Combinator founder Paul Graham. In the bootstrapped SaaS space, though, single founders make up many of the most successful companies. In fact, over half of the respondents (56%) to our 2022 State of Independent SaaS Report were single founders.

The short answer is: no, you don’t need a cofounder. In fact, the most equity you will ever give away is to your cofounder. No investor, employee, or advisor will come close to owning the amount of equity you give away when starting a company with another founder and splitting it 50/50.

Being a single founder has its own list of pros and cons. The beauty of being the sole founder is the simplicity. You don’t have to play nice with a cofounder, and you get to make all the decisions.

One of the major downsides is that you need to make all the decisions and do all the work yourself. Especially in the early days when resources are tight, this can be isolating and mentally challenging.

Most of the single founders I know have a strong network, whether it’s other founder friends they can lean on when things get tough, mentors or advisors they can bounce ideas off, or a long-term mastermind group (I talk more about masterminds later in the book) that offers ongoing support and advice and serves as a sounding board.

There can be enormous value in having a partner in the trenches with you as you travel this long journey. Here are some thoughts to keep in mind if you’re considering a cofounder:

Are Your Skills Complementary? Too much overlap means you’ll argue over certain areas of the business and neglect others. The best mix I see is a developer founder pairing with a marketing/sales founder or a developer and a subject-matter expert.

How Well Do You Know This Person? You are effectively entering a marriage. If you don’t know the person well or have never worked with them before, take things slow. “Date” by working on small projects before equity changes hands.

Are You Protected If Things Don’t Go Well? Talk to a lawyer. Make everyone’s equity vest, typically over four years. One of the worst things you can do to your company is let a founder walk away with 50% of it after working on it for a few months. At my SaaS accelerator, TinySeed, we wanted to but sadly declined to fund several companies in this situation.

How Much Value Does a Cofounder Add? The biggest question to ask yourself is: Will joining forces with this person make the company more valuable? Will it help it grow faster? Although this is a difficult question, I’ve found that being on the fence about whether someone will bring value means you should probably find another option.

Some companies I see don’t need more founders. Sometimes they need fewer.

The partnership between cofounders is almost like a marriage. There are interpersonal dynamics and intense decision-making. There’s financial responsibility. At times you’ll spend more time together than with your significant other.

Add a third or fourth person into that mix, and there can easily be too many opinions to serve the business well.

I understand the impulse. Starting a business as a solo entrepreneur is scary. Starting one with a partner is less scary. So why not bring a few more onto the bus?

What often happens is that when three or four friends get together to start a company, one of them is a weak link in the chain. If you’re in this situation, you may already know in your gut who isn’t pulling their weight. And that weak link will be detrimental to the business—both in terms of the increased growth you need to justify having that founder on board and because there are too many chefs in the kitchen.