Co-founder Duties and Responsibilities (With FAQs)
By Indeed Editorial Team
Updated 28 July 2022 | Published 15 November 2021
Updated 28 July 2022
Published 15 November 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Setting up their own business is a dream for many young, talented and qualified professionals with high aspirations. While some can start new ventures on their own, a few like-minded individuals can always come together to start a new business. A co-founder is an individual who starts a business with the help of others. In this article, we examine what a co-founder is, what are co-founder duties and responsibilities, and how to find one.
What Are Co-Founder Duties And Responsibilities?
Most co-founders assist a company's leadership and have a range of specified duties and responsibilities. The exact role of a co-founder may differ from business to business. Some may not participate actively in day-to-day business decisions. Some may take up titles like CFO or COO and make day-to-day business decisions to manage operations. Some common co-founder duties and responsibilities include:
Fundraising is one of the principal duties of a co-founder. Not all co-founders bring investment to the company they co-founded. Instead, they can help to raise funds for the company. A co-founder's knowledge about the product or service and its capabilities can help them pitch effectively to potential investors. Investors prefer co-founders who have thorough knowledge about their product or service, and are enthusiastic, persuasive and communicate well. A co-founder benefits from knowing the financial requirements of a startup. This allows them to plan and do the duties to raise working capital.
One of the differentiating characteristics of an entrepreneur and an employee is their ability to take risks. A new business or startup can face risks related to the product, market, finances, employees and execution. A co-founder understands each risk and helps the business and its executive team to mitigate their impact. They may take the help of qualified professionals or risk managers with experience in specific fields.
Building lead teams
An important responsibility of a co-founder is to identify and build a leadership team for the business. In most startups, the efforts of a managerial team result in success. The co-founder's ability lies in identifying individuals whose vision aligns with that of the business and who can work towards it with total commitment and dedication. In the initial days, a co-founder assigns duties and responsibilities to the team, maintains morale and motivates them to keep the momentum going. They also help in conflict resolution to help every member perform their best.
Developing the business
Startups are excited about an idea and its resultant product or service. A co-founder can build relationships and partnerships that can help the business grow. Co-founders take initiatives that are crucial for the business, right from the ideation stage. Focusing on the long-term sustainability of a business entity is one of the key duties of a co-founder.
Exploring market opportunities
A co-founder may research the market and identify products that consumers want. They can also understand if there is a good market for the product or service they intend to launch. Since a co-founder can also see the bigger picture, they can figure out what works for a customer and what does not. They can then talk to the executive team members and coordinate processes that improve their product or service. They can identify new market opportunities and take steps to expand their presence in the current market.
Creating business documents
It is important for a business to create and maintain proper documentation for all its activities and transactions. Documentation is crucial for business registration, taxation, financial accounting and hiring. Co-founders work with tax experts, auditors and lawyers to ensure that all required documents are in order and as per statutory requirements. Since these documents are subject to the scrutiny of investors, maintaining and updating them is an important duty of a co-founder.
Many co-founders find themselves with a business from inception and have a detailed understanding of its financial status and plans. They engage actively with the founder or other co-founders to track expenditures and spend judiciously until there is a steady flow of revenue. Many startups fail to succeed because of poor financial planning. A co-founder helps the business follow effective financial planning practices.
Developing a product or service
A co-founder can bring a different perspective to a company's product development process. Some founders may be partial towards their product. As a result, they may overlook possible bugs, design flaws and lack of uniform quality. A co-founder can be assertive and can help the founding members look at areas for improvement. This helps them rework their product and build better prototypes before launching. A co-founder plays a critical role in every stage of product development, from design and development to launch and sales.
Hiring the right talent
Assembling an effective team is one of the most important duties of a co-founder. They find candidates who fit well into their job roles and convince them to join the effort. For most employees, salary and job security could be major concerns. Others may want to challenge themselves and grow along with a new startup. A co-founder has the duty of finding the right candidates based on the company's requirements and budget.
Businesses that start with one or more co-founders are usually small until they get the required funds for expansion. Some businesses may get funds but may run into issues with the product. Sometimes, businesses face roadblocks in marketing or their product may not get enough exposure. These are normal risk situations for any new business. A founder or another co-founder could get demotivated, lose interest, and may want to give up. A co-founder, in such cases, knows the right thing to say and do to help the team get back on their feet and continue the work.
FAQs About A Co-Founder
Here are some frequently asked questions about a co-founder:
What is a co-founder?
The co-founder of a company is an individual who helps the founder of a company set it up. A business endeavour can have one or more co-founders, each with distinct duties and responsibilities. A co-founder can be part of the business from conception, or a founder may bring them on board to balance the skills they lack or require at the start of a business venture. A co-founder may start as part of the executive team or can become one later if they join at a later stage.
When does a business need a co-founder?
If you have a business idea and a plan but are not clear on how to proceed, you can look for co-founders who can help you define your ideas and execute your plans. A co-founder then becomes part of the founding team. You can also look for a co-founder later during the expansion stage, or include a person with the particular skills the executive team requires. For example, if you are starting a technology business and need someone to help you sell the product, you can choose a co-founder who is a marketing specialist.
Related: What Is Organisational Culture?
What are some beneficial traits and skills of a co-founder?
A co-founder can be an experienced, skilled and visionary leader. They typically focus on the mission and the fundamental goals of a new business. When you need a co-founder, look for certain traits that can help you build your business and achieve sustained success. A few beneficial traits in a co-founder are:
Passion and enthusiasm for the opportunity
Ability to align themselves with the vision of the new business
Skilled in areas that other co-founders lack
Conflict resolution capabilities
Credibility to win over investors and customers
How do I find a co-founder?
If you have a business idea and know for sure that you need co-founders, you can first look for one in your network of friends, family, colleagues and classmates. Even if they cannot be a co-founder, they may refer you to someone who can be one. You can also browse through crowdfunding websites and find co-founders there. Professional social media networks, startup events, conferences and career websites are other ways to scout for a co-founder.
What are the advantages of having a co-founder?
Setting up and running a business on your own is appealing. But it requires consistent, calculated and coordinated efforts . You may be required to work in many legal and technical domains that may be new to you. Running a business alone can be strenuous and can be work and time intensive. Having a co-founder can distribute or mitigate the strain.
A co-founder may know a startup's goals in as much detail as the founder, and this helps to set up the business faster. They can help with problem-solving and view things from a new perspective that can help the business. They may invest themselves in the startup to a greater extent than an external consultant or advisor. Co-founders can also contribute and invest towards initial business expenses.
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