Co-founders through an investor's eyes
How an investor looks at a founding team: what a founders' agreement means to them, why a one-person business does not qualify, what the road to a unicorn costs and how long it takes. Findings from Stanford and venture funds are translated into decisions for partners.
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Why are partners' starting expectations almost always too optimistic?
Even in SaaS only 3.3% of startups reach 1 million ARR within a year, 13.4% within three, 25.1% within five. One partner can wait 5-7 years without dividends, another expects payouts in 12-18 months, so goals and timing belong in the agreement, reviewed yearly.
Topics: Co-founders through an investor's eyes · Money between partners · Partner expectations
Why is a business built on one person no use to a partner or an investor?
Nearly all Michelin restaurants in Andalusia lose money: haute cuisine rests on the chef and has no scalable model. A business that depends on one partner's energy and contacts holds the investor hostage; a partner's value lies in building a system, not in overwork.
Topics: Choosing a business partner · Co-founders through an investor's eyes · The hero partner and overwork
What does it cost to build a unicorn, and what has partnership to do with it?
For a valuation above $1 billion a company raises $340 million on average (median $250 million). But investors also examine how the partnership is built: roles, decision mechanisms, agreements for disagreements. This is trust capital.
How does the founders' agreement affect a startup's valuation?
Investors dislike surprises, and these usually come from co-founders: without clear agreements the risk of conflict and of a sudden departure grows. A signed partnership agreement shows an investor rules of the game, predictability and maturity.
What matters more in a partner: an MBA or experience?
Experience. In 2000 every second senior investment partner in venture capital held an MBA; in 2025 only 36% do. The key question is not where a partner studied but what value they can bring today and tomorrow.
Original: LinkedIn
Topics: Choosing a business partner · Co-founders through an investor's eyes
Why does the road to a unicorn call for agreements worked out early?
Becoming a unicorn takes 6.6 years on average and many rounds: 91% pass Series B and 21% become unicorns at Series D, while 33% of seed-funded startups never reach the next round. Hence co-founders need worked-out agreements, ideally a signed partnership agreement.
Can a partnership agreement indicate the quality of business partners?
An agreement shows partners can negotiate: they understand timing, duties, responsibility and consequences of breach. If a company runs on spoken words, its promises to clients will likely stay spoken too; per HBR, clear expectation-setters earn 25% more.
Topics: Co-founders through an investor's eyes · Partnership agreement
Should founders spend their energy on a name and a logo?
No. The author mocks the claim that renamed companies are 7.5% more likely to become unicorns: Zimride became Lyft and Facebook became Meta as they grew. The investment belongs in the business and in the partners' relationship.
Topics: Co-founders through an investor's eyes · Forming a partner team
How long after the first venture money does a startup become a unicorn?
On average 4.5 years after the first venture funding, per Ilya Strebulaev's analysis of 1,516 US unicorns: the peak is year five (123 companies), and 88 made it in under a year. Without clear agreements between founders, such a marathon cannot be run.
What do investors look for in startup founders?
The founders' personality: due diligence, the ability to defend a position and hear arguments, referrals and personal meetings before investing. The author sees a partnership agreement as a "founder's licence", proof that co-founders can actually reach agreements.
Original: LinkedIn
How long does it take a startup to become a unicorn?
On average 6.6 years, per an analysis of 1,044 companies (Strebulaev, Stanford): the peak is years 3 to 8, and after year 10 success stories thin out. Unicorns most often have two or three founders with clear agreements.
Original: LinkedIn
How often does a co-founder leave a startup in its first years?
Carta data (13,133 startups, 2015-2024) show that in 25% of venture-backed startups a founder leaves within four years, before the stake has vested. Hence the case for a vesting schedule, a plan for a founder's exit and a partnership agreement.
Original: LinkedIn
Topics: A partner's exit from the business · Co-founders through an investor's eyes · Data and research · Equity split between partners
How much does a business partnership resemble a marriage?
In the US, charts of marriage length and of startup exit times nearly match, though the author sees no causal link. What matters more: for over half of startups the road to exit takes more than 8 years, so expectations and an exit strategy must be agreed at the start.
Original: LinkedIn
How does the number of co-founders affect each one's exit value?
In a Stanford GSB analysis of 606 US unicorns, each added co-founder cuts net exit value per person by about 32%: from $2.1 billion for a solo founder to under $0.5 billion each at six or more.
Original: LinkedIn
What experience did unicorn founders have before founding the company?
A Stanford GSB analysis of 2,507 founders of venture-backed US unicorns found that 22% had founded companies before, 19% were vice presidents or directors, 13% worked in technical roles and 10% were CEOs. The author advises choosing partners with such a background.
Original: LinkedIn
Topics: Choosing a business partner · Co-founders through an investor's eyes · Ideas from adjacent fields
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