Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Cofounders vs. Founding Team Members: How do you decide the right titles for the right people?

As an entrepreneur one of the hardest things after finding cofounders is finding the right people to be employees 1-4 or 5. Of late I've seen a lot of people calling them (And calling themselves) "Founding Team" or "Founding Engineer." I think we'd all agree there is a pretty big difference between the first 5-10 hires.

I'm wondering from other entrepreneurs what you think the difference is between cofounder and founding team member and where should the cap be on # of employees on a founding team? If number of team members isn't the gating factor, is there some other inflection point where new hires move from 'Founding Team' members to 'employees'?


19 Replies

Tim Kilroy
10
0
Tim Kilroy Entrepreneur • Advisor
Analytics - LTV - Boosting Profits - Digital Marketing
There is a weird fetish these days with anything to do with "founder" in the title. I, personally, never refer to myself as a "founder" of my company, and the folks on the team are on the team...just like I am. While we all have varying degrees of equity and variable option prices, we are all on the team. There is zero functional difference between a founder and an employee. Being a "founder" is a necessary step in creating a company. That work is DONE. Incorporation papers are signed - that is no more special than choosing which payroll service to use. Stop the founder fetish - all of those folks on the "founding team" should focus on what happens next rather than the act of "founding". Being a founder is easy - being sustainable and successful is hard. Skip the concept of "founder" altogether.

In terms of ideal team size on day 1, it all depends on what you have to do and what you can afford - day 1 requires the same thinking as day 10000 - do I have the resources to do what I need to do as I need to do them...
Corey Blaser
2
0
Corey Blaser Entrepreneur
Founder at Origami
I definitely refer to my original team as founders, but in humble terms. I believe as the leader of our company that my partners deserve the respect of coming in before we had money, customers, and even a fully fleshed out idea. They took a huge leap in trusting that the idea would work. They quit good jobs and gave up other opportunities to be part of something they believed in.

Anyone else who comes in after the 'hard work' of the 'startup' has been done is an employee. Plain and simple. They are part of our team and we value them just as much, but they are still employees. They did not want to or did not get the chance to sacrifice and risk everything. That is not to say that being an early employee of a startup is easy or risk free, far from it. But that is why they generally get options from the key hires pool. Because we want to reward them, but they are not founders.
Rich Goidel
0
0
Rich Goidel Entrepreneur
Business strategist, group facilitator, agile practitioner and corporate muse
IMHO...

Founder = Shared in original conceptualization AND launch (not either).
Everyone else joined (works for/with) the company.

I agree with Kim re: size. Size is the bare minimum required to support your business model. No more, and likely less.
Steve Simitzis
4
0
Steve Simitzis Advisor
Founder and CEO at Treat
For me the dividing line is when the startup has been sufficiently de-risked. That could be at revenue or traction or the first round.

Here's another dividing line: You're hiring employees when they ask "what health benefits do you offer?" on the interview. You're hiring your founding team when they ask "is this for pay or equity?"
Kerry Davis
0
0
Kerry Davis Entrepreneur
CEO / Founder at AirBridgeLabs
Founder (s) - where the core idea(s) originated and were prototyped (prior to any pivots or money) to fulfill a needed product for a key market they have identified compelling use cases for.
CoFounder(s) - significantly enhanced the core idea(s) or pivoted towards a better market OR brought key synergistic financing/partners into play
Founding Team - Superstars in implementing the above, with 150% ownership of getting their part done no matter what.

I've worked for 2 startups where the CEO/Founder came 2 name changes in and1 or 2 pivots. But he brought the A round with him and was somewhat a burden for the rest of the run. Those 2 companies both failed, but not because they gave them the title (which helped them land future failures and financing). The title of founder is important because perception is value (unfortunately) and in the case of being on the founding team, helps with retention and a feeling of ownership.
Chris Carruth
1
0
Chris Carruth Advisor
VP/Director. Strategy | Business Development | Operations | Product | Solutions
I believe founders are really, IMHO, people who captured the essence of the business at the start, no matter what their expertise is nor what sector it is in. You could have someone who works in fast food come up with a new app concept that applies to retail in general. Can he/she code - not likely. Can he/she put together a pitch deck - not likely. Doesn't matter - the vision was founded by he/she.

However, if it is to have a chance to go from there to being a reality, the "founder" must build a core set of resources with functional expertise to "make it so". These resources are co-founders, and typically have far lesser equity positions than the actual "founder".

In this situation what is the "founder's" role? He/she does not have the expertise to move it forward and is entirely dependent on the co-founders, not just for functional expertise, but also to provide credibility and assurance to funding sources that there is a chance it can work. Point being that for all the focus on the founder, it may be the co-founders who actually make the real difference.
Jared Hardy
0
0
Jared Hardy Entrepreneur • Advisor
Founding Director at Data Roads Foundation
Titles are always worthless compared to real actions. I'd say the most objective line between "founder" and "employee" labels is where initial risk equity stops, and standard employee salaries and benefits begin. Team sizes vary too widely to matter as a "founder" metric. Are you paid to work at a startup commensurate with what you would be paid at a larger more established company, either as an employee or contractor? Then sorry you're an employee, no matter what stock options you are currently holding or how small the team was when you started.

For one example: I consider myself a cofounder of the last AAA console game developer I worked at, not because I was the 6th to join, or their 1st internal IT and tools specialist. It was because I was only "paid" in potential equity value for my first 5 months there, until we got our first major contract signed and funded. I was there for all the studio client pitches, dressed unusually well and completely unpaid. I even helped decide on the company's first official incorporated name, and supported the CFO (who joined on after I did) through the starting process.

All jobs have some level of risk behind them. Ancient giants of industry go belly up or "restructure" all the time. Are you taking personal financial risk on top of the risk of the early new venture, by being paid primarily in its possibly worthless equity? Are you putting any of your own personal cash, credit, or unpaid sweat equity into the company to help keep it going? Then you're taking founder risks, and deserve the cofounder title. If not, you're a fully paid employee or contractor. Seems pretty simple.

Joe Johnston
0
0
Joe Johnston Advisor
Co-founder at Loop (California Labs)
Peter Thiel in his Zero to One book and Sam Altman in this blog posttalk about equity splits between the first 20+ employees.

For me, "founding team" represents the first few employees that warrant early stage equity packages (5-10% combined). A title of "founding engineer" or similar doesn't really mean much, but it can be used as a hiring hack and badge of honor. I title of "first five" would probably be more accurate and meaningful.
Arlen Meyers, MD, MBA
1
0
Co-Founder,President and CEO, Society of Physician Entrepreneurs at ceo@sopenet.net
Start up teams need players in the skill positions: problem finders, problem solvers, business builders, story tellers, money finders, score keepers and legal protectors. They should be appointed to accomplish the next critical success factors. Then, you might have to change the line up.
Richard P. Ashton, CSO
1
0
Richard P. Ashton, CSO Entrepreneur
Sales Process | Operational Optimization

There are Founders &Co-Founders. Everyone else has a title. Period.

Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?