• Devansh Lakhani

Strategies on building successful co-founder relationships in start-ups

Strategies on building successful co-founder relationships in start-ups

Although it’s possible to create a successful start-up on your own, many stakeholders including investors look for and recommend having a strong founding team with one or more co-founders whose skills complement yours

1. Define role responsibilities early:

It’s not uncommon for co-founders to clash over questions regarding who is responsible for what and when/where each person’s duties should/must be performed. It’s crucial that co-founders explicitly determine role responsibilities as early as possible.

2. Create and sign a founders’ agreement:

A founders’ agreement — i.e., a legal document that explicitly outlines a number of vital parameters amongst each of the founders of a company (from roles and responsibilities to equity ownership and vesting to intellectual property assignment) — is essential to ensuring consistency of vision, understanding of duties, and mutual acceptance of expectations amongst you and your partners. Hammer out the specific details: duties, equity ownership and vesting, and intellectual property assignment.

3. Agree on time commitments:

Involves discussing and agreeing upon the amount of time that you and your various co-founders will spend working on your new business. Develop clear expectations of how much each person will contribute and when.

4.Agree on an exit plan:

If you and one or more of your co-founders want different things then a tough decision needs to be made as to whether it’s in everybody’s best interests for the current group of people to continue working together. Do not leave unanswered key questions about what each member ultimately wants to do with the company.

5. Develop and Agree on a “we failed, now what?” plan:

Decide early-on what it would take for you to conclude that the business has failed and what would be done in response. Nobody ever plans to create a failed start-up, to dedicate years of their lives to trying to build a company that ultimately flops. And yet, it happens all the time. Strategies you can use to help you build a health relationship between you and your co-founder(s).

About Devansh Lakhani

Director of Lakhani Financial Services, and a Chartered Accountant, he helps start-ups raise funds from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. He has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments

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