1/ Valley VCs don’t like solo founders

I recently heard about a partner at one of Silicon Valley’s top venture funds, yes one in the absolute inner ring, who refuses to fund a solo founder. The following anecdote was shared with me by a mutual. The Partner was sitting on the fence when it came to a solo founder, and persuading him to commit to taking a cofounder. The solo founder pushed back and said he has a termsheet from another fund. The VC / Partner told him then that he was better off taking the termsheet from the competing VC. 

It is not just him. Another of the valley’s storied institutions, Y Combinator, has a strong preference against solo founders. In fact they clarified recently that they have funded solo founders, and so it is not a blanket ban. But as Garry Tan, its CEO, clarified, they then persuade you to take on a cofounder.

Source: X / Twitter

Sahil Lavingia, founder of Gumroad, has a provocative post in his blog about how YC insists on cofounders and further, an equal equity split between them, so that it can become the kingmaker in case of a cofounder conflict. Here is a graphic from his blogpost. I am not sure how much truth there is in this, but it is a fascinating intellectual provocation.

Source: GOD mode / Sahil Lavingia

In fact, the bias against solo founders is so strong that it comes up repeatedly in tweets by founders, and other VCs. While other biases (against tier 2 colleges, against women etc.,) are easing), the solo founder one still goes strong. This despite the fact that there are formidable examples of solo-founded startups such as Amazon, SpaceX, Zoom etc. To illustrate this lingering bias, let’s look at data from captable management co Carta.

The number of startups founded by solo founders has grown in number and proportion (from 17% of 2,600 startups in ‘15 to 35% of 3,800 startups in ‘24)

Source: Carta

But when it comes to VC funding there hasn’t been similar progress. In fact, as a proportion of VC-funded startups, the number hasn’t changed much (15% in ‘15 to 17% in ‘24), though the absolute numbers would have risen.

Source: Carta

Anecdotes validate the data. This below from a founder.

Source: X / Twitter

This below from a VC!

Source: X / Twitter

2/ I am pattern-matching. You are stereotyping. He is biased!

No VC sets out wanting to be biased intentionally. VCs are students of pattern-matching and are hewing to established convention / pattern that startups with cofounders are less risky than startups with a solo founder. Now it is true that there are more unicorns with cofounders than ones that are solo-founded; four times as many in fact.

Source: Super Founders / Ali Tamaseb

But that doesn’t mean that solo-founded startups are more likely to fail than those with cofounders. There has in fact been no definitive study of how the number of founders influences failure or success. What we have is data that most unicorn startups have cofounders. But then there are twice as many startups with cofounders than solo ones (Carta chart above), and almost five times as many VC-funded startups than solo ones, so it is not surprising that there are four times as many startups with cofounders than solo-funded ones amongst unicorn outcomes.

So why do VCs prefer startups with two or more founders?

Now there are several advantages of having a cofounder or two:

  • One, founding / building is a lonely, stressful journey and having a cofounder or two helps ease the journey. 
  • Second, two (or more) highly committed hands are better than one when it comes to building. 
  • Third, and this was an interesting one I came across in a blogpost by Flo Crivello, the solo founder of AI agent startup Lindy, that most successful startups pivot, and that solo founders are less likely to pivot! Per Flo Crivello: “Being solo makes finding PMF harder in two ways: you lack a thought partner, and, most importantly, you run a bigger risk of being in denial.“ Clearly having a cofounder affords you some one to spar with on roadblocks, revisiting priors, and thereby explore a pivot when things aren’t going too well. 

Aside from these above advantages, past patterns may be a factor too for VCs preferring cofounders over solo founders. It may be that the individual VC’s most successful startups have been led by cofounding teams, and he or she is thus sticking to what has worked for them. A VC may also use a founder’s ability to recruit a cofounder, especially someone technical, as a proxy for the strength of the idea or even the founder’s persuasive skills. They may think of a solo founder thus: if they were not able to convince another person to join them, how will he or she evangelise the message to a wider audience?  

3/ Where the solo founder scores

Personally though, I think the default VC belief of preferring cofounding teams over solo founders is a bit overstated. Having personally seen four cofounding teams (out of 20 I support) lose a founder within a couple of years of starting up, tells me that most cofounder decisions (at least in India) are not deeply thought out. I have also seen that in several of the startups I work with, a significant amount of my interaction is with the CEO, or what I term as Prime founder (I go into depth on this below). I have also seen in startups which have lost a cofounder elevate a senior executive who has performed well over a long period of time into a cofounder role. Given all of the above, I haven’t personally seen any overwhelming advantages to having cofounders. Not surprisingly, my last two picks have solo founders (one female, and one male).

Are there any advantages for solo founders over teams? What is the devil’s advocate for solo founding? 

  1. Solo founders can move faster – they don’t suffer coordination costs of having to convince or align a cofounder on a decision. 
  2. If you don’t organically have a cofounder already, then you don’t have to spend time searching for one, and delay working on the problem. Your time is finite, and an hour spent on cofounder dating is an hour away from working on the problem (though one can say that the effort spent in explaining the problem and potential solution helps clarify the same better in your mind; so there are some advantages to cofounder search!). 
  3. Then there are challenges with cofounders who don’t evolve. I have seen cases (these are visible; there may be many invisible) of the CEO cofounder struggling because of his or her technical cofounder struggling to grow / manage scale. 
  4. You have more equity!

In defence of solo founders, it is also important to understand that the term cofounders describes a legal construct. It doesn’t imply that the cofounders have a deep friendship or longstanding relationship. In fact as you will see in the next section there is a continuum of cofounder bonding, from people who have known each other for days to siblings. 

4/ All cofounder relationships are not alike

Dropbox founding story via Dropbox blog.

As the above chart shows, at one extreme end there are cofounders who have known each other since college days or even before (this was so with edtech startup Classplus, also one of my portfolio companies). At the other end, there are founders who met via cofounder matching programmes or accelerators like Entrepreneur First (the cofounders of insurtech unicorn Tractable met while interviewing to join the  Entrepreneur First cohort). In between, somewhat closer to the left end, are cofounders who met as colleagues and worked together for a while, and know each other’s quirks and personalities (e.g., the cofounders of Lattice met at Teespring). And again, in between, somewhat closer to the right end is where you are connected by friends, such as with Dropbox. The left side is broadly what I call organic cofounder selection, based on longstanding relationships.

Do note that all of the above four examples are success stories, where they hit PMF reasonably early. The vast majority of startup journeys are failure stories where they don’t hit PMF. While I don’t have data on how each of the above four cofounder pick modes play out in reality, i am willing to hazard that the chances of founders who met in college or as colleagues, and who have known each other for a while, sticking together as cofounders during tough times is higher than those who met via friends or cofounder matching programmes. Incidentally Wharton Professor Ethan Mollick, in his book The Unicorn’s Shadow shares that the most successful cofounder arrangement of these four is when coworkers come together. Per him entering into a cofounding arrangement with friends (with whom you haven’t worked together over a long period) was “almost as bad as starting with strangers”. 

What about family members as cofounders? They are less popular than the above but several examples abound. The two most common relationship types are siblings, especially brothers (e.g., Stripe, Zerodha), and spouses (e.g., Cisco, VMWare, MamaEarth). I have also seen a father son combination (CampK12), though that one (parent-child) is less popular than sibling or spouses. Is there any data around success probabilities for these family member cofounder arrangements. The challenge is that there aren’t too many examples of these, and hence I don’t think there has been a definitive study on this topic. 

Some VCs may also have preferences for strength of cofounder relationships. In my case, if I am backing cofounders, then I prefer to back cofounding teams who have known each other for a while, and between whom there is a fully charged trust battery. I have seen a fifth of my picks see a cofounder depart. Further my most successful investment thus far, Classplus, fits the pattern of cofounders who have known each other since their high school days (they were in different high schools but met at a test prep) . That said, I am not a universal representative of VC behaviour overall. Many VCs may not have such preferences as I do for a high degree of cofounder bonding; in fact many in my own firm also don’t have such preferences.  

Still, my advice is try and find your cofounder via the ‘organic route’ – someone you have known from the past as colleague or friend, or someone you meet along the path of ideation / exploration, and you figure out you are right for each other. It is even better when you both decide to team up and then figure out what the problem to go after is, like the Material Security team who met as colleagues at Dropbox and decided, well-ahead of starting up, that they would launch a company together.

5/ Inorganic cofounder picking and cofounder dating 

What if you don’t have the possibility of arriving at a partner organically? There are sites like YC Cofounder Matching, Wellfound (previously AngelList Talent where you can post or access cofounder jobs) or even programmes like Entrepreneur First or Antler where you can match with other cofounders and also get funding. There might be other local community initiatives such as events or recurring meetups hosted by VCs or sector interest groups where you may find other like-minded folks, and interact with them to explore if they would be interested in cofounding. You would ideally want the interactions to cover topics ranging from the obvious, such as their interest areas or their company-building preferences to the uncomfortable, such as equity splits, decision-making, bringing in a third cofounder, firing each other, etc.  Front’s cofounders Mathilde Collin and Laurent Perrier met at an incubator and asked each other “tough questions that emerge in the course of the startup journey, such as what happens if I want to fire you? Or you want to fire me? Or you want to sell and I don’t want to sell. Should we have the same ownership in the company?” 

Gloria Lin, cofounder of Siteline, a billing & payments platform for the construction industry, created a 50-question long questionnaire to figure out alignment between potential cofounders. In a First Round Review article, Gloria Lin also shared her framework for cofounder dating, a systematic process where potential cofounders assess initial chemistry and then proceed to brainstorming / building a light prototype, and in parallel fill in the questionnaire and go over the answers together, to determine if they wish to commit to each other. The cofounder of YC-funded Whalesync, Matthew Busel, who met his cofounder via YC’s Cofounder Matching Platform, has written a step-by-step guide to match with a cofounder. In the post, Matthew also includes a detailed checklist to run the cofounder dating process. While these are helpful guides, the process of discovering a cofounder is never easy, given it fundamentally involves subjective people decisions and all of the complexities which come with it. Do budget for messiness. Now, what happens if despite all of the above, you can’t get a cofounder? You have identified a problem, but you still don’t have a partner. Do you still start up? 

6/ Defraying solo founder risks

I personally think you should startup even if you can’t identify a cofounder and convince them to join you. It is a bad idea to rush this critical decision given the risk that future friction or misunderstandings between you and the cofounder can derail the project. What is more, you can always choose to bring in someone appropriate as a cofounder sometime down the journey.  Flo Crivello, solo founder, who we encountered earlier via his thoughts on solo founders pivoting less, concurs in his piece on going solo: “I’ve come to view the idea that you absolutely need a co-founder as one of the most harmful memes in Silicon Valley. It’s probably killed more companies than any other misconceptions out there. Instead, I think one should go solo if they can, and only get a co-founder if they are absolutely sure that they found the perfect one.“ 

For solo founders, there are principles and mechanisms that you can put in place to defray risks of being a solo founder. Let us cover some of these risks and what you can do to counter them

  • Lonely journey: You can get advisors or mentors, either ex-founders or experts, compensated with equity if needed, who could be sparring partners or sounding boards along the way. 
  • Less hands on deck: While it is true that two cofounders can do more than one, it is the case that you can hire a seasoned executive or two, early on to make up for the lack of a specific skill or functional expertise. Given that you are not sharing equity with a cofounder, you can increase the size of the ESOP pool to attract and reward talent.
  • Funding risk: What if VCs tell you they can’t fund you without a cofounder? Tell the VC that rushing into a cofounder decision which doesn’t work out could risk the business’s prospects and it is in the VC’s best interest to give the business time to find a cofounder. Also, nothing stops the solo founder from promoting a promising and committed early team member to a cofounder, a few years down the line. For instance, Amplitude cofounder Jeffrey Wang, joined nearly two years after it was founded by Spenser Skates and Curtius Liu. In India, we saw food-tech and quick commerce unicorns Swiggy and Zomato elevate their CXOs to cofounder status. 

7/ Prime founder

A fact that is unspoken in the startup / venture world, is that the CEO or fundraising founder, over time gathers unequal power in the relationship between the founders. This is natural, as by enabling funding and through interactions with VCs (by selling the investor product as I term it, in addition to the customer product), they tend to have a much more strategic and holistic understanding of the business, its growth levers etc.  When you raise funding, and over time become the face of the co, you also get an unequal voice in deploying it, and gradually overshadow the other cofounders who overtime become functional leaders with say on key decisions. The fundraising founder + CEO now becomes the key / main founder, or as I term it, the Prime founder.

We see that when a company becomes very large, it is largely identified with one founder, and you don’t know if the company has or even had a co-founder (e.g., Zomato, Meta). Usually when a non-prime co-founder leaves the company, the VCs aren’t too worried. The outgoing co-founder’s equity is reset and some of it is given to the prime founder, and the rest is kept for CXOs they need to hire to replace the outgoing cofounder’s functions. Most toptier VCs too are aware that non-prime co-founders will exit as the co scales up. They have seen this playout repeatedly. Hence, it is the prime founder on whom the venture capitalist is betting. I do too. In most Investment Committee discussions, from what I have seen and heard, there is a lot of discussion of the prime founder, and very little on the supporting co-founders. Given this fact, I am often surprised by the fuss made by some VCs who mandate a cofounder.  

8/ TLDR

It is good to have cofounders, especially if you find them organically. Don’t fret if you aren’t able to find them organically, as there are frameworks and playbooks to do cofounder dating (see list below) so as to find a cofounder inorganically.  But it is not the end of the world if you still don’t find one. There are ways to convince investors, and supporting mechanisms and ways to make this work. If anything, the risks of a cofounder with whom you have a conflict is far more dangerous for the company than being a solo founder, so don’t rush into a cofounder partnership.

9/ Recommended readings

Before we wrap this section up, here are some relevant resources (including some covered above) for finding, and thinking about, cofounders, in one place.

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If you want more recommendations around specific subtopics in PMF, or have any queries in general, please feel free to hit me up at sp@sajithpai.com! 

This essay repurposes content from the last section of Chapter II of my PMF Playbook.