How To Find The Right Co-Founder

Learn the playbook and pragmatic tactics for early-stage fundraising from Mike Wilner, a startup founder, advisor, and author of Oversubscribed, a book on seed fundraising.

 min read
Last Updated: 
July 5,2021
Article Category

A Tactical Guide to Seed Fundraising

Learn the playbook and pragmatic tactics for early-stage fundraising from Mike Wilner, a startup founder, advisor, and author of Oversubscribed, a book on seed fundraising.

 min read
Last Updated: 
July 5,2021
Sachin Maini
Editorial and Content Lead
Sachin Maini
Editorial and Content Lead
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Co-founder relationships are complicated. As co-founders, two (or more) people will find themselves pitted together against some of the most difficult problems they will ever face, over a span of many years. 

The reason why people so often make comparisons between being co-founders and being married is because both relationships are typically long, high commitment, and immensely costly if they fail. But unlike with dating and getting married, good advice on not just finding a co-founder, but finding one that is likely to lead to a successful partnership over the long term is hard to come by.

One of the unique advantages of On Deck is that our ODF program gives us access to a large, vibrant, and growing community of founders. Since launching last year, 414 companies have come out of ODF which have raised a total of over $350M in venture funding, and ~30 ODF companies per month raise with our runway fund.

Many high-quality founders join ODF explicitly for the purpose of finding a co-founder, and this gives us a vantage point into the patterns of a successful co-founder search process.

We thought it would be a good idea to distill some of those patterns into this playbook about how to find the right co-founder. Like with dating, there is no one right way to founder date. Given the variety and complexity of startups, there are a lot of exceptions and edge cases — so don't take anything here as gospel. 

But while there's no one-size-fits-all approach, and smart people can disagree, if you're looking for a way to build an intentional and strategic process in looking for your co-founder, this playbook is a good place to start.

What to look for in a co-founder

At a high level, there are two basic things you are looking for in a co-founder:

  1. Someone who can help you solve core risks to the business
  2. Someone who agrees with you on first principles of company building.

Let's break this down. 

A co-founder should help you solve core company risks

First, the main thing you're looking for in a co-founder is someone who de-risks your business. For example:

  • If you're building a healthcare startup, one of the natural things people (i.e. investors) will likely ask you is "what's your unfair advantage when it comes to relationships in the healthcare industry?"
  • If you're building a startup that requires core expertise like a deep tech startup, investors will want to know you have the required expertise.

In general, a co-founder de-risks your business if they help you gain an unfair advantage in some important way — whether it's with a core skill set that few others possess, a valuable set of relationships, or unique knowledge/expertise relevant to your startup.

You want the founding team to have as many of these unfair advantages as possible. The more of these advantages you have, the more you de-risk the business because the founding team helps differentiate the business from both incumbents and future competitors.

For example, ODF alumni Charles Hua and Soumya, the founders of Poised, an AI-powered speech and communication coach that recently raised a $4.5 million seed round, talk about how their long background of struggling with the problem with communication, along with their product and business backgrounds at Alexa, Microsoft, and Glassdoor, helped give them an unfair advantage to address the problem of communication in online meetings. 

A co-founder should agree on values and how to build a company

The other big thing you're looking for in a co-founder is someone who shares your principles on company building. The co-founder you're looking for should be aligned with you on:

  • Business goals - Are your goals for the business to get to IPO or bust? Or to target a quick acquisition? Do you want to take venture money, or are you uncomfortable giving up control of your company early on?
  • Culture goals - How do you want to build your culture and organization? Will it be design-driven (e.g. Jack Dorsey, Steve Jobs) or more data-driven (Mark Zuckerberg, Jeff Bezos)?
  • Values - What are the core values that you can’t compromise on?

Alignment around these goals, and the core motivations that underlie them, is critical to the success of a co-founder relationship. In choosing a co-founder, make sure you're coming from the same first principles.

For example, Tory Reiss, an ODF alum who founded Equi, a fast-growing fintech startup, was able to find the perfect co-founder during his time at On Deck who aligned with him on skill, temperament, and values after having left his last 2 startups due to cultural and value misalignments between the founding team. It’s a clear case where alignment along these dimensions made a world of difference to the co-founder relationship and to the success of the company.

A co-founder should make you (more) productive

The litmus test for co-founder pairing is whether you can become more than the sum of your parts working together.

To determine if a team is a good match, the best metric is often how productive you are when working together towards a meaningful goal. This should be measured by looking at work inputs you as a group can control – shipping product, customer conversations, sales meetings. Can you accomplish this thing by that date?

This is more important than if you are good friends or like each other a lot. It’s easy to conflate “is this a good personal relationship” and “is this a good working relationship”, but they are two different things — and the primary way they’re different has to do with productivity. If you aren’t more productive together, then it might not be the right fit.

Where to look for a co-founder

The analogy between looking for a co-founder and dating is an apt one for many reasons. One of the biggest is that finding a date and finding a co-founder can come from more than one place.

There's a narrative that co-founders have to either be college friends or have worked together before. But this is less true than commonly thought.

For example, the co-founders of Stemcentrx met on Craigslist. The founders of Coinbase, Brian Armstrong and Fred Ehrsam, initially met on Reddit.

Meeting people online is a growing way to meet people in general — whether they be co-founders, coworkers (remote companies), dates (dating apps), or friends (online communities) — and never more so than in a post COVID world.

Not very long ago, people were embarrassed to tell their friends that they met their spouse or significant other online, preferring to make up cover stories like "we met at a bar". But dating culture has evolved since then to the point that today, a curated app in many ways sounds more thoughtful than the randomness of a bar.

What has become true with dating for our personal lives will also soon become true of dating for co-founders: we'll laugh at how we preferred the randomness of school or past jobs to an app or a program. All other things being equal, it's great if you have known a prospective co-founder for a long time and already have trust with that person, but it's not a need-to-have. This is because:

  1. Trust can be built on an accelerated timeline, as we'll discuss in more detail later.
  2. It's easy to think you know someone better than you actually do, leading to false positives.

Regarding the second, working with somebody as a founder in an environment of incredible intensity is very different from most normal environments where you get to know someone. The person you thought you knew in the context of casually hanging out at school or at work could turn into someone very different in an extreme, high-pressure environment.

So when founder dating, it's important you don't overcorrect for how much you think you know someone, as it can be misleading. It can also restrict your options unnecessarily: the pool of people you already know and trust is a small pool. The pool of all available potential co-founders, if you learn how to date for co-founders and get to know someone well in a short period of time, is much bigger.

Just like many marriages end in divorce, one of the biggest killers of startups is founder breakups. We believe it's worth rethinking the matching process to try and consistently produce better outcomes by teaching founders how to date for co-founders instead of relying on their existing networks.

How to date for co-founders

If you don't already have a cofounder in your network, how do you get started "dating" for one?

Step 1: Build Your Top of Funnel

As we wrote in our tactical guide to seed fundraising:

When you're hiring, you're talking to a bunch of candidates and trying to get them down the pipeline — the same practice should be used here. You don't have to be waiting on an answer from one before going to the next, as this will slow you down.

You can apply similar logic in the co-founder "dating" process — and this requires building top-of-funnel so that you can move quickly and attract many possible matches to move forward with simultaneously. 

There are 3 ways to attract a lot of qualified inbound leads:

  1. Tell the world what you're thinking (e.g. write a post, host a meetup, etc.). This puts a bat signal out that will help you find people who are also interested in what you're planning to do. When you're in the process of leaving your job or exploring what to do next, write a Medium post explaining what you're looking to do next or with your thesis on the specific space you want to work on, if you have one.
  2. Join a community like On Deck. See our recently published playbook on How to Find a Technical Co-Founder Through On Deck <TK link> by ODF fellow and Skritswap founder Melissa Kargiannakis for a detailed look at how to build top of funnel and "founder date" for co-founders with the help of a high-quality founder community.
  3. Build an audience. People often talk about building an MVP when it comes to product, but there's also a minimum viable audience you need to launch a startup — especially if you're building anything in consumer. To do this, start writing/podcasting/going on other people's Substack to get the word out about your startup idea.

Writing and creating content will not only help you with your co-founder search but will also be an asset down the line with attracting early hires and customers — while also serving to refine and sharpen your own thinking.

The good news is, just as with online dating 6 or 7 years ago, co-founder dating tools are starting to gain some real traction and viability. For example, at On Deck we are currently in the process of building our own co-founder search:

There are also existing "founder dating sites' like CoFounderLabs (who say they have 400k members) which can be used to meet prospective founders online. But as mentioned earlier, the best way to build the top of funnel and expand your network of possible co-founders is going to be putting out your own signal or joining a community like On Deck.

Step 2: Pre-Filter Your Inbound

The next step is to write a one-pager for yourself on what's important for you in a co-founder, so that when you start dating you'll be prepared and know exactly what you're looking for. This is a good exercise for your own clarity, but if you feel comfortable enough you can also share it directly with people in the process of founder dating so that prospective co-founders can self-select.

In addition to the business and cultural goal alignment discussed earlier, there are three other things you should specify in your one-pager in helping you further define what you're looking for in a co-founder:

  1. Complementary skills. How will you and your co-founder, together, have an unfair advantage from the relationships and skills you possess as a pair?
  2. Value-mission alignment. What will success look like to you? What won't you compromise on? This is something you'll want to bring up in potential early dates.
  3. Company alignment. Who will make decisions? What tradeoffs are you willing — or not willing — to accept? Who will be the CEO, and who will have final say in case of disagreement?

Getting to company alignment with a co-founder early is particularly crucial. If investors see a company that doesn't know who the CEO is yet, and yet they're pitching to fundraise their pre-seed or seed round, their default instinct will be to dismiss that company as unserious.

The rule of thumb we suggest with company alignment is that you want to be 50/50 on economics but have one clear CEO. Having a clear decision-maker is necessary to move fast, but being generous on economics is important to get the best of both worlds in which the co-founders all feel equal, but don't end up getting bogged down by decision making.

Step 3: Set Up Your First Date

After sorting through your top of funnel and pre-filtering based on your match criteria defined in your one-pager and the On Deck Founder Questionnaire, you'll now get down to some of the more serious potential matches.

You may think you've found the person, but you don't want to jump straight to a shotgun wedding — you still need to achieve trust and get to know them better. So what do you do then? How do you find out if they really are "the one"?

We think that the best way to accelerate trust and create a bond is to simulate an intense, founder-like experience as early as you can in the matching process. Some ideas for how to do this:

  • Go on a road trip or other intense experience like living together for a short time.
  • Do a hackathon, or work together under stress early so you can simulate the hard times to come.
  • Meet the person's spouse and/or parents if possible — you learn a lot about people by meeting those most important to them.

The goal is to socially "engineer" trust and vulnerability in a short timespan and go through intense bonding experiences. A single session of high-pressure, collaborative work will give you a lot more (relevant) information about a prospective co-founder than 1 hour coffee dates every day for three months, or even knowing someone for years.

A hackathon, living together over even just a weekend or a few weeks, or shipping a small product are great ways to manufacture this experience — while also accelerating the strength of the co-founder relationship.

  • Write down individually what “peak productivity” would look like as a duo. You will use this later on to evaluate for a go/no-go decision.
  • Build something you can ship together within a week.
  • This doesn’t have to be your main startup idea. It can be an existing side-project or something whimsical. The important thing is just to understand what it’s like to work together.

Step 4: Create Alignment & Prevent Common Failure Modes

During or after a first date with someone, you also want to gather some critical information directly to help vet the match. Here are some ideas for non-obvious questions to ask that will help you calibrate your alignment with them during the first date:

  • In what ways are you crazy? What are your failure modes?
  • What was it like for you to work with your ex co-founders?
  • If your past co-founder relationships didn't work out, why didn't they?
  • What's most important to you in starting a startup? Being your own boss/ managing people? Money? Fame?

The answers to these questions, along with the actions/ behavior you observe during your high-intensity "date", will likely give you more than you need to decide whether to move forward.

It's also important early on to scope out common co-founder failure modes. To do this, first figure out: are you the co-founder who has clarity around the vision, or are you the co-founder who's going to build it?

Typically, the co-founder who has clarity around the vision is the CEO. If both co-founders think they're in charge of the vision, and therefore constantly butt heads over what direction to go in, it can lead to a lot of problems down the line.

Another common failure mode to avoid is having different goals. Example: if one co-founder wants to make $50m from their startup and exit in 5 years or less, and the other never wants to sell, it will almost always cause serious problems down the line. Sometimes you can reconcile different goals, but you should try to ensure they're not incompatible with each other in the long term.

Other things to figure out — talk early and often about:

  • What success looks like (outcomes, cultures, roles)
  • Non-negotiables
  • Who's in charge in case of disagreement — make sure there's a clear CEO or tie-breaker
  • Personal runway and how much salary they'd need ( this factors into how long you'd be able to last without having to raise money)
  • Other extenuating life circumstances
  • 5-20 year vision for their lives
  • How each of you wants to scale your roles with the company
  • What the equity split will look like (we suggest something like 50/50 as a rule of thumb)
  • If the startup were to fail 3 months from now, what would be the most likely reason?

Clearly spelling these out up front will strengthen the relationship and make it more robust for the long term.

Step 5: Say No, And Say it Often

Co-founder issues are one of the biggest risks for startups for a reason — breakups are very common. 

Many companies suffer because people stay with the wrong co-founder too long for the wrong reasons — i.e. they are friends, relatives, or spouses and even if you see all the signals that you should break, you may be tempted to ignore them because “it’s supposed to work” or having the “break up” conversation awkward. 

But if you’re co-founder dating, you should be prepared to break up often and quickly, and as early in the process as possible. Looking for alignment means you need to recognize when that alignment doesn’t exist. This, by the way, is another reason why it may not make sense to co-found a company with a friend or someone you’ve known for a long time. It’s much harder to break it off when it becomes clear it isn’t a fit.

5 days to a week is often enough to know who is not a good fit — although it may take months to make a positive match and commit to a co-founder. The goal is to cut your losses quickly if it’s not a fit

  • Assess the relationship objectively, with a “breakup” as your default outcome. 
  • Reflect on your productivity while building. Did you meet/exceed your bar of peak productivity that you wrote down before? If not, don’t move forward.
  • If a breakup makes sense, cordially part ways — and repeat the process. 
  • If the match works well, move forward by setting up a real first date (see step 3 below)

Step 6: Make It Official

After you've found someone who gives you an unfair advantage with their complementary skills or network, and is aligned on roles, decision-making, goals, and motivations, you should make it official.

With giving equity to a co-founder(s), you should think about it like a 10 year journey. Don't be short-term and focus only on dilution — ask yourself "what amount should I give my co-founder that would be most likely to increase the overall value of my shares and lead to a committed co-founder?" over "how much equity am I giving up?".

In general, we like to urge founders to give as close to equal equity to even late co-founders as possible if they're amazing (i.e. 20x more valuable than a first employee). With giving equity to a co-founder, you should think about it like a 10 year journey that you’re both embarking on together. Instead of just focusing on dilution, ask yourself what amount to give them that would be most likely to increase the overall value of your shares and lead to a committed co-founder.

If you are willing to give your co-founder a really great title & equity, make sure to communicate to them that there are multiple founding moments of the company and that them being a co-founder would not only be reflected in the titles but also the company structure — all of this is important in making them feel fully bought in.

What if you have to convince a prospective co-founder that you really like to join you? Some people think it's a negative sign if they don't join you without taking some convincing, but this is probably an overgeneralization. Some people are hesitant to build conviction, but after they do, they end up being all in.

For example, when On Deck was starting out there were a number of early employees that took years to recruit — and ended up being some of the most committed people in the company. It works this way for employees, and often also for co-founders.

How do you tell if someone is seriously considering joining you as a co-founder, vs. keeping their options open at your expense? To scope this out, simply ask them "what needs to be true for you to be all in?"

If they don't have an answer, or couldn't imagine any conditions under which their doubt would go away, they're probably not ever going to join. But if you can get them to elucidate crystal clear conditions of what would strengthen their resolve, e.g. if you recruited the right person, raised money, understood customer needs to a greater level of granularity, etc., then your path forward is clear — go and fulfill that condition, and they'll be willing to come on board.

Usually, when people say "the timing is not right" to join as a co-founder of a startup, they're just not truly bought in yet. The best thing you can do to persuade them is to de-risk joining you, either by raising money, or getting proof of problem, or showing customer traction.

You also want to let prospective co-founders know that you're running a process. Just as you want to create FOMO to produce leverage in the fundraising process, you also want to clue in prospective co-founders that you're talking to other people — but make sure to make your interest in including them clear so that they know you're seriously interested in moving forward.

Step 7: Rinse and repeat?

How many co-founders should you have? Do you even need any, or is going solo best so that you can save the equity for recruiting and fundraising?

Nothing great was ever built by committee, so there's a natural upper limit to the number of co-founders that will make sense. But ultimately the number of co-founders doesn't matter — what matters is that there is clear decision making and an unfair advantage for your founding team vs. incumbents and other startups in the same space.

Whether that formula leads to 2, 3, or 4 co-founders varies on a case-by-case basis. Keep in mind that great companies tend to require multiple special advantages, so it's a balance between getting there while also keeping decision-making streamlined.

Co-Founder Problems Are The Startup Killer

It's often said that the two biggest risks for startups are not finding product-market fit, and co-founder issues.

The goal of your co-founder matching process should be to minimize the risk of co-founder issues while maximizing the time you spend on finding PMF — although this is a bit of a chicken and an egg situation (nothing solves relationship tensions like winning, just ask any sports team).

As we mentioned at the beginning, the frameworks presented in this playbook are not gospel. Nor are the archetypal founder experiences of successful startups of the last two decades in tech necessarily representative of the path you should follow — whether it's the "solo founder" arc of Mark Zuckerberg or Brian Armstrong meeting Brad Ehrsam on Reddit.

There are no hard and fast rules. Because startups are a game of outliers, it's hard to find general trends across many successful companies.

Whatever your particular case, it will generally work better if you try to be intentional about building a process, clearly define what you want for yourself and your business, try to create alignment with prospective partners, and get to know them and build trust under intense conditions. This will help minimize co-founder issues, increase your chance of building a world-changing company, and smooth your entrepreneurial journey.

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