- The most important part of starting a company is finding the right co-founder.
- Having a co-founder increases productivity, provides moral support, and helps with pattern matching to success.
- Single founders can be successful if they have high conviction in their idea and can make progress without a co-founder.
- When looking for a co-founder, it is important to consider how they handle stress and if they align with your goals and values.

- When starting a company, it is important to have aligned goals and motivations with your co-founder.
- Skills and complementary abilities are important in a co-founder, but it is more crucial to work with someone you trust and enjoy working with.
- Look for co-founders among friends, colleagues, and people you already know.
- Starting with small projects can help you identify who you work well with and develop a taste for complementary skills.
- Don't be afraid to ask people you know to be co-founders, and if they decline, ask for introductions to potential co-founders.
- Attend meetups and events related to your interests to meet potential co-founders.
- Online communities can also be a good place to find like-minded individuals.

- The video discusses the process of finding a co-founder for a startup company.
- It suggests allocating a specific amount of time to work together and set a deadline for achieving certain goals, such as building a prototype or pitching customers.
- It advises starting with a 50-50 equity split between co-founders, unless there are specific circumstances that warrant a different arrangement.
- The video emphasizes the importance of ensuring both co-founders are happy with the equity split and motivated to work on the company long-term.
- It also discusses the decision of who should be the CEO, stating that it should not be a source of friction between co-founders.
- The video recommends formalizing the partnership through legal processes such as incorporating the company and setting up a vesting agreement.
- It suggests making the leap to formalization once both co-founders are committed to building the company together.

- Finding the right co-founder is crucial when starting a company.
- Co-founders increase productivity, provide support, and help with success patterns.
- Single founders can succeed if they have strong belief in their idea and can make progress alone.
- Consider how potential co-founders handle stress and if they align with your goals and values.
- Aligned goals and motivations are important in a co-founder.
- Trust and enjoyment in working together are more crucial than skills and abilities.
- Look for co-founders among friends, colleagues, and people you know.
- Start with small projects to identify good working relationships and complementary skills.
- Don't hesitate to ask people you know or attend meetups and online communities.
- Allocate time and set deadlines for achieving goals with your co-founder.
- Start with a 50-50 equity split unless specific circumstances require a different arrangement.
- Ensure both co-founders are happy with the equity split and motivated for long-term commitment.
- Decide on the CEO role without causing friction between co-founders.
- Formalize the partnership through legal processes like incorporating and setting up a vesting agreement.
- Formalize the partnership once both co-founders are committed to building the company together.

In this Startup School lecture, YC Partner Harj Taggar shares advice on how to find the right co-founder for your startup.

Transcript and lecture slides here: https://www.ycombinator.com/library/8h-how-to-find-the-right-co-founder

This lecture is part of YC's Startup School, a free online program and global community of founders. Register and join the community at https://www.startupschool.org/

Chapters (Powered by https://bit.ly/chapterme-yc) - 
00:00 Introduction
0:25 Why have a co-founder at all?
3:43 Starting without a co-founder
7:10 What to look for
11:13 What about skills?
13:38 Where to look for a co-founder
20:18 Making the leap
22:36 Deciding equity
24:40 Who's the CEO?
27:28 Formalizing things

Looking for a co-founder? Try YC's new co-founder matching platform: https://www.ycombinator.com/cofounder-matching

Hi, I'm Hans Stager and I'm a partner at Y Combinator.

be talking about what I think are going to be the most important part of starting a company, which is finding the right co-founder.

So let's start by talking about why should you have a co-founder at all.

Well, I think there's 3 main reasons you really want a co-founder when you're starting a company.

You can get a lot more work done if you have someone to divide the work up with, and you can get much better work done if you have a co-founder who maybe has complementary skills so they can do things that you can't, and they're someone you enjoy discussing ideas with so you can brainstorm and come up with better ideas than you could alone, or help have someone to talk you out of potentially bad ideas.

So you get a lot of uplift in just the amount and quality of work you can do with a co-founder.

Startups are an incredibly intense and taxing journey.

And it's great to have someone you can lean on for support during the tough times.

And what I've noticed about the best co founder relationships is they have this dynamic where both co-founders kind of balance each other up.

So if 1 founder is having a bad day, they're feeling a little down, despondent, and they've become a little pessimistic and feel like the startup is about to die, the other co-founder can just help bring them up a little bit and keep them going, keep them motivated and vice versa.

Sometimes you get too carried away, you sign a customer and you think you're guaranteed to IPO and you can use someone to just ground you and bring you back to reality a little bit.

And so that's where I kind of find the best co-founding relationships can help kind of even out some of the highs and lows of the emotional roller coaster that is a startup.

And while you can get some productivity increased by hiring people or bringing on contractors, you don't get that same emotional support that you do from a co-founder because ultimately anyone who's working for you, you're the boss and they're not as invested in the success of the startup as you are and you can't really be as open or honest with them about the company as you can be with a peer and that's what you get from a co-founder.

The final reason I'd say to have a co-founder is pattern matching to success.

If you look at a list of the most successful startups in history, think of Apple, Facebook, Google, Microsoft, they all had co-founders when they started.

And now, I think sometimes people forget this point, because when you think of these great iconic companies, you associate them with a single person, usually the CEO, who's over time risen to become prominent, famous and a bit of celebrity.

So you know, when you think of Apple, you think of Steve Jobs, when you think of Microsoft, Bill Gates, and we think of Facebook, Mark Zuckerberg, right?

I think it's completely true that over time, and we're talking at this point decades, because that's how long successful startups are around for.

Over that time period, it's pretty common for 1 person to kind of really drive the company, become the figurehead for it and stick at that company for a long, long period of time.

But we're talking about the earliest stages of starting a company.

And in those days, all of these founders had co-founders that they lent on for all the reasons I just mentioned.

So I think it's always important to remember that when you're starting a company and wondering whether you should have a co-founder or not.

Okay, So hopefully I've convinced you that you really do want a co-founder when you're starting a company But what if you're really keen to get started on a company right now and you don't have a co-founder That's immediately available or someone that you can bring on board Should you wait to get a great co-founder before you start the company, or should you just go ahead and get started?

Well, I think the default answer is that you should wait because of all the reasons I just mentioned, all the benefits that you get from having a co-founder.

But Y Combinator has funded single founders and we have done so successfully.

So I've noticed that there are some exceptions to this rule, and they tend to follow a particular pattern.

And that pattern is that the single founder, so it's like a company by themselves, has 2 things that are true.

So 1 is they have an idea that they have incredibly high conviction about, either because they're solving a personal problem for themselves, so they really know solution is necessary, or they're a domain expert.

They're working in a field where they know for sure, sort of technology that's missing, who the customers might be.

So the result of that is they have such conviction in the idea that they don't need a co-founder to convince them that this is a good idea to get started on.

The second condition is that those single founders, they're able to make progress on that idea without a co-founder, in the short term at least.

And that almost always means that they're technical, or at least technical enough to be able to build the first version of the product so they can show it to potential investors, or maybe even to potential co-founders who may want to join the company.

And that second point is something I've noticed that the best single founders are also able to do is not only are they tremendously productive in building product and talking to users themselves, they're also able to run a great background search and keep their 4 co-founders and keep their eyes open.

And if the opportunity arises, bring on a great co-founder.

And I think the best example I can think of here would be Drew Hapsing with Dropbox.

So Drew applied to Y Combinator way, way back now in 2007.

He had a really solid idea for building Dropbox because he'd already felt the pain of losing his own files.

So he knew for sure there was a better solution to build, but he didn't have a co-founder.

And so Paul Graham, the Y Cognator founder, messaged him back saying, we love your application.

The idea is great, but we really won't fund you without a co-founder.

So come back to us when you have one." And Drew kind of went away, continued building the Dropbox prototype while also looking for co-founders and found Arash, who would be later the Dropbox CTO and his co-founder, and he applied again and Ycom made the funding.

And now Dropbox is obviously a tremendously successful company.

So that's kind of what I'd ask you to bear in mind is if you're really keen to get a start right now, but you don't have a co-founder, Ask yourself, do you have absolute high conviction in this idea?

You know for sure that this is the idea that you want to work on.

There's no other ideas that you'd be open to.

And can you really make progress without having a co-founder?

And if those things are true, Sure, go ahead and give it a give it a shot.

But if not, I'd really suggest you wait until you do have a co-founder to start a company.

So when you're thinking about bringing on a co-founder, what should you be looking for in them?

Well, I actually think the single most important thing to know about someone before you start a company with them is how do they handle stress?

And the second most important is how well are they going to help you handle stress?

And the reason I say that is startups are incredibly stressful, intense experience, as I mentioned before.

And a great co-founder should be able to support you through those and help you through those.

Because if you're determined and motivated and enjoy working together, You'll keep working on this startup for a long period of time.

And that's usually what it takes to build a really successful company.

So you really don't wanna start a company with someone that you don't know particularly well, because even if you've spent time with them in social events, or you hung out together a little bit, you don't really have insight into how they're going to respond to pressure and stress and are they someone that's going to stick around when things are tough and are they someone that's going to help you stick around when things are tough.

So the best people to start companies with are always people that you've got some set of personal experiences where you kind of know their character and how they're going to respond to those tough situations.

And that usually means they're someone that's a close friend or someone that you've worked with under stressful conditions.

So I'd certainly recommend that you be on the lookout and think about that when you're considering co-founders.

The second thing I think you really want to look for is understanding the goals and values someone has for starting a company or wanting to do a startup.

Honestly I think when I was younger I used to think of some goals and values as being sort of fuzzy terms, they didn't mean too much.

But over time, I've realized really what they mean is understanding the motivations someone has for doing what they do.

And in this context, I think it's really important to talk with someone, even if you know them very well, about why they want to do a startup, what are they hoping for?

And the kinds of things that can come out are avoiding conflicting goals, right?

So for example, let's say that you really want to build a high growth, high intensity, high risk startup.

And you want to push forward, you want to raise venture capital, you want to hire a bunch of people, you want to just really go for it.

And your goal is to take the company public, and you're okay, kind of taking lots of risks along the way to get there.

That's a totally fine set of motivations.

It's a very common set of motivations of startup founders.

But let's say your co-founder prefers to take kind of a slow and steady approach.

Maybe they're more motivated by building great software for a small group of people.

If you just made enough revenue to pay yourself good salaries and to screw a little bit every year.

That's also a completely fine set of motivations or when you start a company, but the 2 motivations that aren't compatible with each other, and they'll lead to inevitable conflict.

So what I'd suggest is make sure that you have this conversation.

And it's not a perfect predictor, because people's goals and ambitions for a startup change over time.

I've seen people start companies because, honestly, they just wanted to get rich and their hope was that they would be able to sell the company in 2 to 3 years for a good amount to a bigger company.

But they got 2 to 3 years into the company and they loved it so much, they got so excited by the challenge that they kept working on it and they're still working on it a decade later.

I'm not saying that having this conversation means you're going to know for sure whether your goals and values are aligned over the next decade, which is again how long it usually takes if a startup is successful.

But at least having the conversation gives you a better chance of finding a co-founder who you're aligned with around high-level important stuff.

Now I think you're probably wondering, I'm talking about what you should look for in co-founders.

And I haven't mentioned the obvious thing, which is what skills do they have?

So it's obviously really important to have a co-founder who has the right set of skills to help you grow the company.

And usually that means someone who's got complementary set of skills to you.

So if you're really great at sales, talking to users, getting customers, ideally you'd have a co-founder who's really great at building product and writing code and building software because the 2 of you can divide and conquer and get a lot done.

While I do think that's really important, I don't think it's 1 you should overly fixate on.

So more important than anything is just working with someone that you like working with and you trust.

And so If the person who best fits that description doesn't necessarily have the perfect set of complementary skills to yours, I think that's fine.

You should still bring them on as a co-founder and then you can start hiring people.

Assuming you can make enough progress in the company to get investment, you can hire people to kind of fill in the skills gaps and that's okay.

Another point I just make on this is when you are trying to decide if someone's got complementary skills to you, don't go too much into the details of how well do their skills map onto the specific idea you're working on right now.

So the common example of this we see sometimes is someone's considering growing on a technical co-founder and they want to build a iPhone app, but the co-founder, even though they know them, they trust them, they've worked with them before, that co-founder isn't necessarily an iPhone app developer, they haven't built iPhone apps in the past.

That's not a reason to want someone out as a co-founder.

What does matter is that they're willing to learn what they need to learn.

So if they're not an iPhone developer, they're willing to learn how to do that.

And particularly, they're willing to learn things that maybe aren't glamorous.

Like startups are often just a grind of doing a lot of boring, grunt work to get the thing going.

And so long as you have a co-founder who's OK with that, it's totally fine if they don't have the perfect set of skills.

So don't rule someone out who's potentially a great co-founder because they don't have this checklist of specific skills you're looking for.

But do make sure you count them in if it's someone that you trust, you like working with, and you've got a good sense of how they're going to handle the stress and pressure of the startup journey.

So where should you look for to find co-founders?

Well, the answer here is a little obvious.

It's to start with the people you already know.

And kind of ironically, the best time to find a co-founder are when you're not actually necessarily looking for a co-founder to start a company with right now.

And what I mean by that is, if I were giving myself advice 10, 15 years ago, what I would say is rather than trying to pick a startup idea and go and find co-founders to work on with it, I would suggest that I just look for people to do projects with.

So if you're in school, look around, see who's in your class, who's in school and identify people you think would be cool to work on a project with.

And this project doesn't have to be a takeover the world idea or company, it just has to be something you find interesting.

Maybe you're into games and you want to build a cool game together.

The thing that's awesome about projects is that it's much less scarier and asking for a far lower commitment if you ask someone to work on a project with you than it is to go straight into, hey, let's start a company together, right?

So you have sort of a higher chance of people saying yes, if you ask them for this.

And the other thing that's great about projects is you can work on different projects with different people and you can start developing a taste for who do you work well with?

Like what kinds of skills are you actually good at as opposed to what you might think you're good at?

And so what kind of complementary skills might you look for in a co-founder?

And again, being in school for college is a really ideal time for this because you're surrounded by lots of people who usually have a decent chunk of spare time.

And so you can start getting together to work on things that you think are fun.

And again, kind of ironically, although this is I'm suggesting you don't try and start a startup, projects that you work on in your spare time often tend to be some of the greatest sources for actually finding great startup ideas and building huge companies.

You know, Facebook's an obvious example, something that started out as a project while Mark Zuckerberg was an undergrad at Harvard and now it's turned into 1 of the biggest companies in the world.

But that's not why I'm suggesting you do this.

I'm suggesting you kind of look for people to work on projects with because that's a great way for you to get a sense of what kind of person do you enjoy working with and what specific type of personality do you work well with.

And this advice also applies if you're not in college or school, maybe you're, if you're working at a company, like look at your coworkers, like keep a list of people that you think are particularly smart, particularly capable, who impresses you and start getting to know them better and ask them if they're up for working on things in the evening or the weekend.

That's the kind of personality that or the kind of person who's interested in working on evening and weekend projects is the kind of person that's likely to make a great co-founder.

I actually remember years ago at Y Combinator Startup School when it was an in-person physical event, we had Phil Libin, the founder of Evernote there, and he kind of gave a somewhat extreme version of this advice, which was that he, sort of years and years before he started a company knew that he wanted to start a company someday and so he would only make friends with people that he thought could someday be a co-founder.

And now While I think that advice is maybe a little bit extreme, if you don't just want to be around people who might be co-founders, there is truth to it.

So I think this is kind of the thing where if you make this sort of a conscious effort well before you start a company, it will probably be the best bet for finding a great co-founder.

But let's say you do know for sure that you want to start a company and you're kind of ready to go again right now.

Well, again, you start in the same place.

You start with people that you know and what I've noticed is an issue people run into here is that they can be really reluctant to just ask people they know to start a company with them and that can it's all kind of reasons there Like maybe you're worried about how your relationship will change, like maybe you don't sort of value the personal relationship more than the risks of working with someone, and those are fair concerns, but it's not the right optimization for starting a company.

So what I'd suggest, a pretty simple algorithm here for finding co-founders.

It's make a list of the people that you know, you're closest to, that you think would be great co-founders and start from top to bottom and ask every single person on there to go grab coffee and go to them and ask them if they'll start a company with you and be your co-founder.

So you understand, but like who would they start a company with and make it very specific.

Ask them if you were starting a company, who would be sort of your top 3 or 4 co-founders that you want to try and convince to work with you and ask them for an introduction to each of those people.

You ask the people you know, if they say no, you at least get some more ideas for names.

And then you meet with those people and you ask them and you simulate, repeat the same algorithm.

Ask them if they'd be interested in being a co-founder with you or not.

And if they say no, ask them who they try and recruit.

And so this way you start growing the tree of potential co-founders beyond those people you immediately know, but at least they're still connected by people that you do know.

So they're not just sort of completely random strangers.

The final sort of bit of advice, let's say for where to look is go out and try and meet people that just have similar interests to you, right?

And so this kind of sounds a little bit just like how to have a social life, but this is essentially what finding co-founders reduces to.

So if you're an engineer, attend like developer meetups or work on open source projects or go to hackathons.

Do things where others, engineers and builders are hanging out and you'll likely find some leads.

Even if you're not technical, if you're interested in those things, you should totally attend those kinds of events too.

But maybe you'll also just attend or find people who are interested in the kinds of things you're interested in.

Maybe you're interested in economics and finance, and that's kind of the pool of things, or that's a pool of interest where you think you'll find a startup idea.

Well, make a real effort to go out and meet people who have similar interests.

And maybe in these COVID times, there's lots of online groups and communities that you can join.

But even in regular times, there's always ways to find people who have similar interests for you.

And because you're consciously on the lookout for people who might make co-founders, you have a higher chance of finding someone who could be a good fit.

So once you found a potential co-founder, how do you test out and know for sure that you both want to start a company together before making a final commitment?

And at some point, you just kind of have to make the leap and hope that it will work out.

But 1 way to de-risk it is to allocate a chunk of time where you agree to kind of work together and set yourself a deadline by which time you want to have ideally like an MVP or a prototype of something built, or you at least want to have gone out and tried out pitching some customers and convincing them to pay you if you did build a particular product.

These are all the things you'd usually do when you're signing up with a new company or testing out a new idea anyhow.

And do that together and agree that at the sort of end of the time that you've set aside, that you'll both have an honest conversation, decide do we both enjoy working together on this?

And if so, great, let's go ahead and make the leap.

And if not be honest and say, Hey, let's go around separate ways.

So making that a little bit more tangible.

If you both have no other commitments, you know, which is pretty uncommon, but sometimes happens if, say, you both graduated college and you didn't go and get a job because you want to start a company, then I'd say treat this like your full-time job.

Say that, hey, we're going to set aside a month or 3 months and let's just sort of pick an idea we're excited about and get as much progress made as we can on building the first version of it and going out and signing customers.

Even if you can't do that full-time because you have other commitments, then do it on evenings or weekends.

But you'll have to sacrifice some amount of time doing other things in order to actually spend time working together.

But the more time, the more hours you can accumulate of working together on the idea, the better a sense you'll have for sure if you want to start a company or not.

So once you've kind of done that, let's say you decided that, hey, we do want to start the company and we want to be co-founders, then I think there's 2 important points you want to make sure that you're in agreement on.

Now, I think the way to think about this is your default equity allocation should really be 50-50.

That's where you want to start from, right?

Because assuming that nothing's been built yet, you're at the earlier stages of the company, you're both going to make equal contributions.

You both want to be equally motivated to work super hard in the company, and all the work is years and years ahead of you.

So there's not really too much reason to deviate from a 50-50 equity split early on.

However, we have seen different equity arrangements and they have been successful.

And so I kind of think the underlying thing that you're solving for here is making sure that both of you are happy with what the equity arrangement is and will be motivated to keep working on the company for a long period of time.

And so again, usually that means 50-50, but let's just say that you have been working on the company for a little bit longer or you take you de-risked it somehow by yourself and you're bringing on what we commonly call a later stage co-founder, then sometimes deviating from 50-50 might make sense.

But again, the thing I would really encourage you to do is not optimize for the short term, right?

So just because you made a little bit of progress in the idea by yourself, and you have a great co-founder, and you're sort of thinking, Hey, maybe I should take 70% and just give me 30% like, because you've made progress in the last 6 months.

Startups are a really long-term game and you want to, you win by making the best decision in the long term.

So if you have a great potential co-founder, and even though you made a little bit of progress on the company yourself, if you know that they won't be all in and fully committed to the success of the company, unless they're a 50-50 partner, you should do that.

You should make them 50-50 equity partner so you can keep them as motivated and get as much out of them as possible.

The second thing I think you really wanna decide is who's the CEO?

Now, this can sometimes be an uncomfortable conversation.

And to be honest, it's actually, I think, a bit of a red flag if it is an uncomfortable conversation.

As far as the actual title itself goes, early on in the startup, when it's just 2 or 3 co-founders, In terms of how it impacts your day-to-day and how you divide up responsibilities, the title doesn't actually matter.

Like early on, you're all going to be doing a little bit of everything.

There's like plenty of like unglamorous grunt work to go around.

And just because you have a CEO title doesn't mean you get to abscond from that.

Right, so practically it doesn't matter in terms of who does what.

1 exception to that might be if you need to be doing sales, it usually might be good if the CEO is a person or whoever has a CEO title is a person talking to customers and users and convincing them because they might feel a little bit more flattered if the CEO is pitching them.

And this kind of gets to the point of where really the only impact the CEO title has, and that is externally.

And I would say specifically for investors.

So investors care about seeing that there is a clear leader and a clear final decision maker or a tiebreaker, and that person should be the CEO.

So when you're pitching investors, it's usually better for whoever is sort of do does most of the talking, whoever is going to be leading those conversations, that that person is the CEO.

And now where you run into problems and a very, very common source of co-founder friction we see at Y Combinator is where 2 people really want to be the CEO.

And we can see this in Y Combinator interviews where you end up with 2 people who kind of talk over each other, they interrupt each other, they can look at each other with a little bit of contempt when the other person's answering.

These are all really, really bad signs, right?

If you think it's really important to you to be the CEO and you both feel that way, you're not good co-founders for each other.

So just avoid all that pain and heartache and don't start a company together.

You ideally want to start a company with someone who doesn't care about that stuff if you do, or you're both indifferent to it and you're fine picking whoever you feel is best suited to the role for now, even if that changes sometime in the future.

So let's kind of wrap up everything we've talked about.

Once you're sure you want a co-founder, which I hope I've convinced you you do, once you run the process to find some good candidates to be a co-founder, and you've identified someone that you really do want to start a company with because you spend a little bit of time working on projects together and testing each other out, so to speak.

Then you have the conversations around what's the equity split and who's going to be the CEO.

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How to Find the Right Co-founder