How To Find a Cofounder for your SaaS Startup in 8 Simple Steps 📈

0:00it was April of 2018 I was sitting at a blackjack table in Las Vegas why I'm holding cards I have no idea they don't let you touch the cards I had just given a talk about bootstrapping versus funding and how I felt like there was this third option that was percolating that wasn't Venture funding but it was people raising a bit of money it was bootstrapper funding or something like that I'd had the idea seven or eight years prior but I didn't have the skill set nor the desire to start a fund and start investing in startups and I mentioned this offhand in a microcomp talk so as I was sitting at this

0:29blackjack table a microcomp attendee came up and said hey if you want to start a fund to invest in bootstrappers I know some people that would invest and I could help with that I was only a month or two out having left my last gig which was the company I had sold two years prior and I'll admit I was looking for my next ACT what was I gonna do for the next five or ten years so this presented a really interesting opportunity for me and that day was the day that Anna volsett and I began thinking about what would become tiny seat the reason I'm telling you this

0:57story is there would be no tiny seat if I hadn't found found a co-founder with anar's skill sets I'm not good at sales he is I don't particularly care about fund accounting and all the legal and all the background that goes into raising a fund there's a lot of complexity and a lot of stuff that's just not fun in my opinion but anarch gets into that and he's really good at it so a co-founder can literally be the difference between you starting a particular company and not that's not the case with every company obviously you can be a solo founder and in fact most bootstrappers are Solo Founders

1:26according to our state of independent SAS survey but in this video I'm going to talk about how to find a co-founder in eight simple steps in case this is something that you're considering and if you stick around till the end I'll tell you the single biggest question you should ask yourself before looking for a co-founder in case you haven't heard this before I'm going to say this sentence that sounds maybe relatively tropey it's that finding a co-founder is like finding a spouse having a co-founder is a little bit like being married you're in a financial relationship it's very hard to undo and it's honestly can become a pretty deep

1:57personal relationship that requires trust and mutual respect and that's why there are several steps to doing this the first step is to evaluate yourself it's to understand what skills and expertise you bring to the table and what your strengths and weaknesses are and to be honest with yourself about this if you're not good at sales and you're thinking of starting a company where you need to sell things it's probably going to be good to find a co-founder who loves it who is exceptional at it these are the best types of co-founder relationships where there's complementary skill sets I have seen multiple companies where two developer co-founders get together and

2:30neither wants to Market or sell they both want to build and be creative this is not a good recipe this is not a recipe for optimal growth obviously can it work yes has it worked yes but in terms of having an optimal outcome or just an optimal relationship two people who kind of go to their own corner and handle different sides of the business is an amazing combination the second step is once you've taken inventory of your strengths and weaknesses is to leverage existing connections so this is to go to any in-person or online networks that you have where you think experienced knowledgeable motivated people are hanging out and this step is

3:05a bit like saying I'm trying to find a spouse what do I do you have to look you have to date you have to talk to people and this second step is exactly that I'll say in a perfect world you would already know the person you're gonna be co-founders with even if you're not best friends so interval set and I didn't know each other that well he knew of me I had seen him around microcomp we had mutual friends but I was able to then back Channel and go to friends of his who were friends of mine or colleagues who had worked with him and get a sense

3:33of who he is and what he was about and I did I essentially checked references on him which is a step we'll talk about a little later but realistically if you have friends colleagues or acquaintances who share your passion or who might know someone who is as motivated as you are to get this done this is where you're just following leads and you're just trying to find someone you can take it to the next step with I will add a note I would think twice before starting a company with family I've seen some work I've seen several implode due to weird family tensions because family history

4:01is complicated if you watched succession you have an idea of the worst case scenario but in reality it becomes very complicated for those around who aren't family to deal with co-founders that are step three is to meet people meet a lot of them ideally in person this is where you're going out to start up events to conferences to workshops there's a reason that we at microconf are running I think we're running eight in-person events this year and more than that next year it's to get you in a room with other motivated ambitious talented people to help you make those connections to potentially find a co-founder we've had many many

4:37co-founder relationships start at our in-person events and don't just attend microcomps there's e-commerce fuel there's rhodium there's Dynamite Circle there's all kinds of meetups where you can meet other like-minded folks step four is really an optional step if step three didn't work and it's to meet people not in person but to meet them online this is a much less effective way in my opinion to find co-founders because online relay relationships just don't have the depth of looking someone eye to eye a room so this would involve joining startup-focused online communities like say microconf connect Indie hackers LinkedIn groups Reddit groups there's slash startups and there's slash SAS and others and there

5:16are also co-founder matching platforms now I've never used these platforms I don't know that much about them but there are platforms like co-founders lab start Hawk and I will tease that microconf is going to be launching our own co-founder matching platform this is by popular demand over the years we have matched hundreds no actually it's north of a thousand folks into Mastermind groups and one of the most requested offerings from microcomp has been can you help me find a co-founder and so we will be launching that in the near future head to microconf.com sign up to our email list to be notified when that's live step five is the cording

5:51process so you've identified a potential co-founder or maybe multiple and this is where you start having a lot of conversations you need to talk about key topics like your vision what you want out of the company Equity splits do you have similar work styles do you have similar personal interaction Styles and a lot of this isn't sussed out by asking questions directly it's by working together so in our volsett and I started discussing what Tiny Seed might look like we started collaborating on a deck a PowerPoint deck to figure out how we're going to sell this to people are we in alignment we've talked and thought

6:23a lot about it and realized hey we are wanting to head in a similar Direction and it does seem like our working styles are complementary I've known several people who were trying to vet co-founders who spent months doing it and even flew to meet them and hang out for a day or two and get work done Jordan Gaul founder of rally and founder of cardhook famously did this with his co-founder um cart hook and they spent months and months trying to figure it out it just takes a long time to find out if your working Styles complement each other step six is something I already mentioned this is checking

6:53references and I don't necessarily mean a background check but can you verify their professional background can you talk to friends of friends who might know them to find out what they've actually done how they've performed at prior rolls if they've been a co-founder how they were at their prior company step 7 is a trial period this is consider working together on a small project like I already said with our PowerPoint deck we were putting together have a defined period to evaluate compatibility between the two of you before you dive into step 8 which is the legal agreement don't skip this put it in writing draft a Founder's agreement

7:25that details Equity splits rules and responsibilities the decision-making process investing schedules vest your Equity if you take nothing else away from this video do not bring a co-founder on and give them half of your company without there being a vesting schedule meaning they gain that Equity over the course of several years usually it's three to four years with a one-year Cliff where no one gets Equity at the start usually it's three or four years and the equity just drips out each month such that if things don't work out someone doesn't walk away with a huge chunk of your company because that can literally kill it before you get off the

7:55ground while there is no step nine if there were it would be to get to work this is the starting line if you've found a co-founder you've found someone you want to work with you have that legal agreement now you start running now you start building that amazing company in a minute I'm going to tell you the question you should ask yourself before even looking for a co-founder but before I do that I want to mention again microcomp co-founder matching is coming soon head to microcroft.com sign up for our email list to get notified when we launch it the question you should ask yourself is do you even need a

8:24co-founder Venture capitalists say you need them but the most Equity you will ever give away is to your co-founder the majority of bootstrapped companies are single founder teams and in fact I think the number is like 85 percent are one and two person teams you don't need a co-founder to start a startup you can do it on your own but of course I've traditionally had co-founders because I've found that traveling this long hard journey is better more fun and I would say even easier with a business partner who's on board and working in the same direction you are once you've brought your co-founder on and you're thinking

8:56about hiring top tier Talent check out this video to learn five secrets to doing just that