Author: founder of Focused For Business, Hatty Fawcett
Hatty Fawcett is an equity expert and founder of Focused For Business which makes it faster and fairer for startups to raise their first or second round of equity investment. Hatty has seen investment from both sides of “the fence”, as an entrepreneur raising investment but also as supporting business angel investors with their investments. Hatty believes equity investment should be available to all, and that it shouldn’t be over-complicated or unnecessarily time consuming.
Heading a business on your own can be hugely rewarding and may seem easier at first to make decisions and build your business with your own vision. However, as your business grows and you look to scale, the decisions can become even more overwhelming. Managing commitments and profit goals is no easy feat to do alone, which is why having a co-founder can be very beneficial. The prospect of having a co-founder to you may seem worrisome, but by breaking down the steps I aim to show you how it can really help your business and make you more appealing to investors.
A complementary skill set will broaden horizons
Investors are always after something new, so consider having a co-founder to add originality.
As a founder you want to inspire and influence the world with your product or service so it makes a positive impact. With one or more co-founders you can do that and appeal to a broader range of investors. When pitching, you can demonstrate how your different ideas and skills go hand in hand. No one can be great at everything, so it is important to reflect that in your team to show you are committed to building your brand. Every business needs a diverse skill set to meet customer demands and retain a USP that still intrigues investors and attracts something new. As a founder you don’t always want to be chasing the same goals, you are constantly adapting and finding new information out. So consider broadening your horizons by seeking out co-founders who will broaden yours and take your business to the next level.
Safety in numbers
Risk is a given in pretty much any business decision scenario. Whether you are branching out to a new customer base or remodelling your business, the risks can always seem big, especially as a sole founder.
While investors understand risk very well, they want to be assured that their money will generate a good return. For some investors, having a co-founder is more advantageous as the risk is reduced and therefore their capital has better protection. A team that possesses a good mix of technical, operational, marketing, and commercial skills reassures investors and gives you the opportunity to confidently talk about each aspect of the business. When pitching you are demonstrating your strengths, so finding someone who can cover your weaknesses will put you and potential investors at ease.
More capacity for growth
When a start-up has multiple co-founders, it often means there is a higher capacity for growth and scalability. Each co-founder can focus on a specific domain or aspect of the business, thereby driving the start-up forward in multiple directions simultaneously. This enables the start-up to scale and adapt to market demands more efficiently, which is an attractive prospect for investors seeking high growth potential. When choosing a co-founder, you should consider one who has experience in scaling a business and knows how to market well. Investors will assess your attributes and talents, so you should do the same when seeking a co-founder for your business. Evaluate where you need to grow and start from there. Co-founders can be found from anywhere. Whether it’s a next-door neighbour or an old colleague. As long as their skills add value, and they align with your vision it doesn’t matter where they come from.
Shared responsibility and decision-making
A final reason why having a co-founder can make you more appealing to investors is the shared responsibility that comes with it. Split decision-making can make the process of scaling your business much smoother. It isn’t always easy to make a decision with another person, however having someone else there with a different view can help you scrutinise and be more critical of your strategy. They may also spot things you have missed and help you manage your workload, giving you a better work-life balance and therefore the focus to make your business a success. A high-quality team will drive your business and enable you to diversify without having to juggle your other priorities. Having multiple contribute to a decision can strengthen your position and give greater assurance to investors that you are the right person to invest in.
To summarise, if you want to give your business more stability and attract different types of investment, having a co-founder will help you achieve that and provide a better balance between your work and personal life. You aren’t surrendering your ambition by having a co-founder, you are taking action and positioning your business as reputable and well-equipped for long-term investment.