Tag Archives: Founder

Why you should never look for a cofounder

This recurring question of looking for a cofounder has been bothering me for years. Similarly I do not like the idea of giving titles in the early days of a startup (project) as you may read here : Titles in Start-ups.

My argument is that you don’t look for cofounders. You have them already, you found them by talking about your project to friends or colleagues. It’s a bit like falling in love, you do not look to marry, you meet people. Point.

Of course, this does not help much, because there remains the loneliness of the entrepreneur. But do we get married just to fill the loneliness? As it turned out, thinking about it, I came across an excellent article in which I totally recognized myself: Everything You Need to Know About Startup Founders and Co-Founders.

Here are some key points:
– A founder is a person who comes up with an idea and then transforms it into a business or startup. If a founder sets up a company with other people, they are both a founder and a co-founder.
– “Founder” and “CEO” are two […] startup titles that people can carry simultaneously. One is a permanent title, while the other is not. “You will always be a Founder or Co-Founder.” Be sure to be careful however how you dole out the Founder/Co-Founder titles. That should be a lifetime title so be sure it goes to the right people who played a major role in the starting of the company and who will continue to play a role in the years to come.
– A founding member can often feel similar to a founder or co-founder because they come on so early in the process that they’re also putting in crazy hours and maybe even taking a pay cut in order to be a part of something important. But a founding team member is an early employee, not a founder. One important difference? The types of stock the two groups receive. Founder’s equity is different from Employee Stock Grants.
– “I’m totally unconvinced that two people can find a person they haven’t known previously, and become effective co-founder,” […] “I think you’re better off finding the money to hire someone than actually find a co-founder.
– If someone has come along a little later in the game, but still early — as in, pre-first employee — then you treat the same any other co-founder! If you’re choosing to add a “co-founder” after you already have employees, though, things can get a little tricky.

One thing is forgotten in the article, it is the investor (friends & family, BA, VC) or institution entering at the creation and from my point of view they are not founders because they do not (generally) contribute to the business…

Finally, the term founder does not seem to me to have a legal existence. It is only awarded by the group of people who recognize themselves as such. There is, however, an interesting example, namely how one of the founders of Tesla filed a complaint against Elon Musk, in particular because he considered that he was not a founder. The complaint is readable here (see page 28).

If you wish to dig a little more, here are two older posts:
The Founder’s Dilemmas – The Answer is “It depends!”
Founder without experience, lonely founder.

Female founders – an analysis from 800 (former) startups

I just decided to add a new analysis to my recent study of 800 (former) startups. Although the topic is an important one in high-tech entrepreneurship, I had never looked at it except anectoticaly in the posts with the tag #women-and-high-tech.


Eight female founders or entrepreneurs. I am not sure how many I would have automatically recognized. And you?

And here are the results I found. My apologies in advance as this work is far from perfect: I tried to identify female founders from their name and this is not always easy. I believe however I cannot be too far from the exact results.

So what does this say?

– There are 76 female founders in 825 companies, which says 9% of these former startups had a female founder. Now to make it worse, the total number of founders identified is 1644.
– It is in the biotech field, that they are most represented (hence Boston, Switzerland, California outside Silicon Valley)
– The good news is that the number is up to 15% for the last decade. Still…
– Now there are only 31 female CEOs, this is only 4% (remember that founding CEOs are a little more than 60% so this is even worse as some of these female CEOS are not even founders – see here if you don’t know what I am talking about). In fact, 20 of these women were founders and 11 were not…

The age of founders and non-founding CEOs

The age of founders has been a recurrent topic here as you might see from tag #age. In my analysis about hundreds of startups (822 at this time, and 600 lately), I just thought it would be interesting to check the correlation, if any, there might be between the age of founders and a CEO among these founders or not. Intuitively, one might think that the less experimented founders may induce a non-founding CEO. So here are the results:

The numbers speak and may seem counterintuitive. A majority (and often an overwhelming majority in the digital world) of startups have a founding CEO and the average age of founders is lower in this case. Question of dynamism, of envy of the team, I do not know …. Do not hesitate to react and comment.

Philippe Mustar – Entrepreneurship in Action – final episode

Here is my last article on the excellent Entrepreneurship in action of which you will find the 5 previous articles with the tag #entrepreneurship-in-action. Here are some final notes:

The ingredients of success

But, those who fund this project are not doing it just for the skills and experience of the three entrepreneurs. They show other qualities that convince to follow them: their passion, their motivation, their ambition. Investors know that these qualities will allow the team to stay focused and better deal with the many uncertainties that lie ahead. To a student who asked a venture capitalist what are the three most important qualities that a project must have to be financed; he replied: the first is the team, the second is the team, the third is the team. Another joke, common in this industry, says that investors prefer to finance a good team with a bad project rather than the other way round (because a good idea carried by a team whose skills do not match those necessary to developing it is unlikely to go far; while a good team will always be able to modify, transform or change an initial idea of ​​low quality). The rest of the story shows that these statements, usually made in the tone of a joke, apply particularly well to Criteo and that those who make them, the venture capitalists, will have to believe in them and hold onto them firmly for several years. [Page 220]

Some criteria explaining success (according to one of the co-founders of Criteo):
– Have been able to focus on a single product
– Aim for excellence in all areas of the company
– Find the right cursor between managing daily problems and anticipating the future
– The ability to make difficult decisions
– Trust in technology

And finally Mustar returns to this process of innovation which looks like anything but a mechanical process:
– A long and winding process, made of many transformations
– An emerging process
– An experimental process
– A process filled with uncertainties, choices to be made, decisions to be made
– A collective process and a distributed action
– A social process

What is an entrepreneur? Are you born an entrepreneur or do you become one?

Mustar addresses in his conclusion a topic as old as startups with all the humility and caution, because it seems like we don’t really know (even if many claim they do know). Apart from the tautological definition, the entrepreneur is the one who creates (and builds) a business, it seems very difficult to find common traits and qualities specifically for entrepreneurs. Still, I am less confortable with his reminder of Peter Drucker’s claim. “Most of what you hear about entrepreneurship is all wrong. It’s not magic; it’s not mysterious; and it has nothing to do with genes. It’s a discipline and, like any discipline, it can be learned.” [Page 287]

I’m a little more comfortable with Komisar’s point of view in How Do You Teach High-Tech Entrepreneurship according to Randy Komisar.

There is no such thing as a monolithic entrepreneurial condition. Even among the very small number of first-time entrepreneurs I interviewed, there is a very diverse range of relationships with entrepreneurship. What characterizes them, beyond the great diversity of their profiles, their temperament, their way of behaving, is more a desire to do, to learn, to succeed, a great capacity for work, listening to others, ambition… but this is by no means specific to entrepreneurs. We find these same desires or aptitudes among employees, executives of large companies, philanthropic activities, athletes, artists, etc. [Page 289]

This journey with these young engineers allowed me to get rid of a conception of entrepreneurship that separates on the one hand an entrepreneur or a team, and on the other an activity of creating a new product and a company. The entrepreneur and the company are built together, in the same movement. [Page 290]

Philippe Mustar – Entrepreneurship in Action – episode 5

This new episode of Philippe Mustar’s book relates to the history of Criteo, a startup already mentioned on this blog here and there.

For once, I disagree slightly with a quote from the book (which is not from the author): “The profile of the team formed by the three creators of Criteo is a perfect example of the one described theoretically by Kathleen M. Eisenhardt (Professor of Management at Stanford University and Co-Director of the Stanford Technology Ventures Program) as “the best it can be.” Kathleen Eisenhardt, based on a lot of research on the subject, defines (somewhat mechanically she herself admits) what a great team is:
– it initially consists of three, four or five people. If there are only two, it is not enough because there are so many things to do in a start-up and above all, being two does not offer a wide enough diversity of opinions, of points of view. If there are six, seven or eight, it is no longer a team, it is a group whose management and coordination take too much time.
– it is multidisciplinary and transversal, that is to say it combines skills in engineering, marketing, finance. But, these skills must be real, that is to say not based only on a diploma, but on actual experience.
– it includes people who have already worked together, this is an important asset because the creation of a start-up is made up of stressful situations, which are easier to share with people you know.
– finally, and this is more surprising, the “best teams” are those which have people of various ages, not only young people in their twenties but also others who have more experience. This often allows you to see different aspects of the same problem.
For Kathleen Eisenhardt, teams that meet these criteria are the ones that perform best. ”
[Page 199]

As much as I can agree if we talk about the management team, I believe that at the time of creation, the founders have different pedigrees. As I wrote in my own book in 2008, “A start-up is a baby created by its parents – the founders. They are responsible for its development and to help it adapt to an evolving world. It does not mean that a founder has to give up control of his start-up. Would a parent give up his child just because he has no experience in feeding and educating? Is the analogy of little value? There is also a responsibility in succeeding in the development. Experts will be used, medical doctors, teachers for the child, professionals, and consultants for the start-up. The Google founders kept such “ownership” during the company’s growth. Eric Schmidt has become CEO but he is more a partner of the two founders. Start-ups seldom develop that well and investors sometimes have to make tough decisions when they take away the “parent” power from the founders. Investors do not like to do this in general and only do it when they consider it absolutely necessary. This is an ideal world but everyone knows reality is more complex”. And I could add, two parents is probably the ideal model.

On the other hand, I fully agree with the sources of innovation: The sociology of innovation has shown that the sources of innovation, like those of the Nile, are multiple and sometimes difficult to identify. It also pointed out that ideas for new products or services are the most common things in the world, and even that they are always bad, always poorly framed and approximate at the origin. As Bruno Latour says: “All important discoveries are born ineffective: they are hopeful monsters,“ promising monsters ”. [Page 251] and the French text by Latour http://www.bruno-latour.fr/sites/default/files/P-92-PROTEE.pdf . [A short parenthesis about Hopeful Monsters, a term I knew only from one of my favorite novels, and I blogged about it here.]

Charles Geschke, co-founder of Adobe, dies at 81

Charles Geschke may not be as famous as many Silicon Valley entrepreneurs, but he is really a legend of technology and software. With John Warnock, he cofounded Adobe in 1982 and he is an exception in the group of founders as he was in his early 40s when he left Xerox to create the company which developed Postcript, PDF, Adobe, Photoshop and so many more products. He died on April 16, 2021.

I had read about Geschke (and Warlock) in a good number of books and blogged about him here:
In the company of Giants in November 2008
A success story: Adobe Systems – John Warnock and Charles Geschke in March 2009

I found yesterday this very interesting short video that you should watch (or read the transcipt below).

Here is the transcript: “when John and I started Adobe we had a sort of simple thought in mind in terms of how we wanted to organize the business

we wanted to build a company that we would like to work at and we sort of used that principle in terms of how we defined the management structure, the operational organizational thoughts that we had about how to put the company together and part of that recognition was that we had constituencies that every business has that need to be balanced

we had our shareholders we had our employees we had our customers and of course the communities in which we operated and if you think about running a business all four of those constituencies are mildly in conflict what’s good for one may not be good for the other and to be successful as a business and to retain the kind of quality employees that you want to have it’s extremely important that you continually monitor how those four constituencies are being served and keep them in balance

a couple other principles people would often ask as they worked at Adobe

well what will it take for me to enhance my career and both John and I would tell them well the first thing you have to figure out is how to fire yourself by hiring someone to work for you who can do your job better than you do and there’s no alternative but to get promoted once you do that

and the second piece of philosophy which is frankly the most critical one building particularly a high technology business is to tell every engineer and every manager that your job is to hire people who are smarter than you are as it’s a much larger population from which to choose and those turned out to in fact have been extremely important in building a business

and again I want to comment that without my relationship with John and our partnership it’s hard to imagine that we could have achieved what we did over the past twenty seven years and we’re extremely pleased with this award and the opportunity to have served our industry

thank you very much

the really cool thing about this award is it’s from engineers we’ve gotten entrepreneur awards before but they’re from business guys and getting award for entrepreneurship from engineers is very very cool

Chuck and I when we started the company weren’t on a get-rich-quick scheme we were frustrated at Xerox and our major frustration is we knew we could invent great technology but no one would ever use it and it would never see the marketplace and I think our major motivation in starting Adobe and continuing with Adobe was to make stuff that people would use a lot of people would use and I think inside of every engineer is that basic need to have your stuff used so that was the primary motivation behind what we did

the other thing in the hardest thing about building a business and keeping a business sustained and going on is continuing to innovate and we’ve never figured out how you institutionalize innovation innovation is a very sort of remarkable thing that sometimes happens sometimes doesn’t but the best you can do is build an environment where people are happy they’re doing an adventure they’re trying to create and hopefully in that process great things will happen”

Coursera files to go public (#750)

After Deliveroo yesterday, here is Coursera’s cap. table. It’s #750 in my long list of startups (see here my most recent analysis – data about 700+ startups).

Coursera and Udacity are probably the most famous MOOCS companies and I could not be surprised if they contributed to create the edtech category. Coursera just filed to go public on Nasdaq so its numbers are available.

Revenues of $293M, with a loss of $66 million in 2020. A lot of venture capital since its foundation in 2011, $464M in total from Kleiner Perkins (and legendary partner John Doerr, and NEA.

Founded by two Stanford professors, specialists of artificial intelligence, Daphne Koller and Andrew Ng, age 43 and 34 at the time of foundation. They are not managing the company anymore. No information about Koller’s shareholding probably because she owns less than 5% of the company and has no executive role.

Coursera founders Andrew Ng and Daphne Koller are computer science professors at Stanford University


Source : NPR

Deliveroo plans to go public

There was a lot of buzz today about Deliveroo announcing its IPO soon. By the way Coursera, the edtech company just announced it too and I will post about it next. So I had to build its cap. table and thanks to the openness of the British register of companies, I could do it (at least partially) even before the company filed its IPO document.

Interesting data I think about the company growth, its funding and the founders stakeholding. £1.3B invested to cover £1.1B loss, 2’500 employees in 2019 and £1.2B revenues in 2020. Among the best European VCs (Index, Accel) plus Amazon, Fidelity, DST, T.Rowe Price as late stage investors. What else?

PS (March 19): a former colleague mentioned an article saying that early investors would have made “60’000 per cent return” on their investement. At the same time, I discovered about Coupang in South Korea which looked similar to Deliveroo. So I also checked the multiple return for seed investors in Coupang. Here is first its cap. table.

So for Coupang, the initial price per share was $0.02, and I assumed a $35 at IPO, which makes a 1750x multiple.

For Deliveroo, I assume a price per share of £900 with a series A price at £8.36. It is true there were also seed shares at £1,5. This would be a 600x (or 60’000 per cent, not an annuela return though)

So Coupang is even better than Deliveroo…

Airbnb files to go public – the last giant?

Airbnb just filed to go public. Finally! It maybe the last IPO of the recent giants (and not the latest only), these giants which emerged in the 21st century, such as

and of course is the cap.table, not that far from what I had tried to guess in 2017 in www.startup-book.com/2017/03/13/what-is-the-equity-structure-of-uber-and-airbnb/

A Fury of Software IPO Filings

After many, many IPO filings from biotech startups in 2020 (I counted 20 out of the 43 I followed and made cap. tables of), the end of August had 8 filings from Software companies (and only 15 in total). I do not think there is any rational here (except maybe Palantir as a trigger), but I decided to have a look at these 8 companies.

These are
BigCommerce (Australia)
Palantir Technologies (see my previous post here)
Asana, Sumo Logic, SnowFlake (Silicon Valley)
Unity Software (Denmark), Jfrog Ltd (Israel)
AmWell (Boston)

You can have a look at some cap. tables in the pdf (pages 633, 636-42) but more than the individual data (also below at the end), it is the (limited) stats which I find interesting:

The data deserve some explanation and also deserve to be compared with the averages of the more than 600 startups studied in the pdf (pages 644-659).

These “young” startups took 12 years to go public, this is much more than in the (recent) past and they used amazing amounts of venture capital, in the hundreds of millions. Even the series A, the 1st round, is huge, about $10M. Their sales are big too (more than $100M for all of them) with a mediam value of $150M. Their losses are not small with a median value of $100M…

Now If we look at shareholding, investors own about 45% of the company, not more than in the past (despite the huge fund raising), IPO shares are pretty small (about 4%). Common shares (mostly employees) is about 35% and you should also notice that these startups have hundreds not to say thousands of employees. As a side comment non-founding CEOs are not the norm and have about 3.5% of the company (CFOs have about 0.7%)

The founders keep about 14%. They are about 2 per company, with a median age of 35 (mean is 33 so slightly lower than the overall 38.

I think all this is pretty interesting and feel free to have a look at overall stats in my post earlier this year: data about equity in 600+ startups.

Equity List August2020