D. Alignment

Alignment between co-founders makes working together significantly easier.

The first and most important element of alignment is appetite for risk. When it comes to founding a startup, every decision made involves some level of risk:

how to spend your runway cash, which customers to sign with, how and when to launch a funding round, and more. If founders have different appetites towards risk, they will constantly clash throughout their decision making process. In the most extreme cases, a lack of risk alignment could cause irreparable stagnation in the company due to the inability to reach agreements. Consequently, ensuring co-founders align in their appetite for risk-taking is one of the keys to a fast moving  team.

An additional form of alignment is a shared vision.

What are you and your co-founders looking for in this endeavor- a lifestyle business? an exit? an IPO? If your vision is not aligned, the chances that you push to the same direction, work as hard, and agree on strategic subjects – declines significantly.

The same goes with professional alignment in terms of experience, expertise, and the founder's unique value to the company. If one of the founders is far stronger in their expertise than another or more experienced and knowledgeable in their area of ownership, at some point he or she will feel that they lack an equal. Prior to officially launching the company and becoming a team, founders should have several brutally honest conversations, where they set expectations regarding all the above to ensure that they are aligned.

Real Life Examples

Real Life Example 01

One founder is a young family man with young kids and one founder has already built and sold two startups. The older founder finds it very hard to be patient, and understands the needs of their co-founder who must allocate time, resources, and attention not only to their startup, but also to their family.

Real Life Example 02

The founder who is also the VP R&D of the company, has already managed a significant team with a significant budget, is highly experienced in the startup ecosystem, and has built up their reputation as an expert in their field. In contrast, their co-founder who is responsible for the commercial and business aspects, came from the corporate world- a very different environment. While he or she may be great at business development, after transitioning to the startup world their co-founder feels that they have major gaps in startup culture: the rhythm, pace, and expectations, which are vastly different than the corporate world.

Tools to assess a Founder

Tool 01

Ask each co-founder to write what their end goal of the company is on a piece of paper and compare - what gaps and alignment clues do you see?

+ Positive Indicators

Founders’ answers to the question regarding the end goal of the company are similar enough that you can tell they have discussed it in depth previously.

One founder shares their endless vision and building an empire while the other  talks about selling for X amount of dollars- one sees a price tag and an end in sight, while the other does not.

- Negative Indicators

One founder is happy to have their chair, their computer, a mediocre salary and stability as an end goal (lifestyle business), and one founder wants to build a billion-dollar-company.

Tool 02

Check LinkedIn profiles, compare calibre of previous companies as well as positions that they held in their previous jobs.

+ Positive Indicators

They have held positions at similar levels (hierarchy) at previous companies.

- Negative Indicators

You see on LinkedIn that a former VP R&D in a unicorn company teamed up with a product manager in a mid-tier startup, you must ask why? This is not black and white, but does demand some further investigation as to the gap in their experience and expertise.