How Many Cofounders Is Too Many?

The adage "the more, the merrier" does not necessarily apply when it comes to the founding of IT startups. The issue is not so much one of equity distribution as it is an issue of agility. One is lonely. Two could be a deadlock. Three or more could breed free riders. But there is much more to the consideration. This includes, among other things, how long you've known your cofounders; whether they are doers, mere talkers, salespersons, thinkers or creators; whether they intend to be actively involved or passive investors.

As is often said: a hundred percent of nothing is nothing. You could be asking whether each additional person who joins your start up, brings as close to the amount in value to the company as they take in equity. But the more important concern, regardless of the equity offered, is whether the additional member is more a source of distraction, disharmony and confusion, than a source of inspiration, motivation, direction and execution.

The so-called detractor is not acting with the intent to see failure. They actually want to succeed as much as you do. Their distractions may come from valid disagreements regarding the viable path to success. Nobody knows how things will turn out. Regardless of your knowledge, smarts or wisdom on the business concern, there are factors far beyond anyone's control that could affect success. In the end, whatever you do, is intended to maximize the probability that the outcome of your adventure will be as desired. However, great minds may differ.

Tugging in different directions would mean stagnation and almost certain failure. It is better to commit down the path to uncertain failure, get there, and re-chart a direction for a preferred outcome, than spin in circles in a business sector that has no tolerance for paralyzed analysis.

You want the right cofounders on this journey with you. You want highly-motivated, highly-energized, smart, knowledgeable, wise doers. You are on a journey to accomplish the impossible, with limited human and financial resources. You do not need yes-men. You need people who will carry their weight and much more. So, assuming you're that Superman and you've found super-heroes in "self-starterdom" like you, the next inquiry is "are you all sufficiently on the same page to go on this grand endeavor together. If you are, great! Consider three cofounders or less. If you aren't, hopefully, you are as motivated as you think you are. The journey alone will be tough. But then, it would have be even tougher with detractors.

It goes without saying that the creation of the legal agreement which will govern the relationship between you and your cofounders is a contemplation that comes only after you've taken the much more significant step of selecting the right partners in the first place. In my next posting, I will go through key considerations for an operating agreement between cofounders.