(801) 980-5300

How many founders should a startup have?

How Many Founders Should A Startup Have?

One question we are asked is how many founders should a startup have? There are credible studies supporting that successful startups have more than one founder, but not too many. There is an optimal number.

More than one founder allows for opposing views between founders. This can be healthy for the startup. However, too many founders though can be detrimental for a couple reasons. Too many founders dilutes the overall leadership. Leadership by committee can bog down important decision making. On a related point, too many founders suggests weak leadership. More specifically, too many founders suggests there is an absence of strong leadership at the CEO level of the startup. These are viewed negatively when outside investors are considering a stake in a startup.

The optimal number is two founders, possibly three, but not more than three. Three is really getting to a crowd. Although there is argument to be made that having three equal founders allows for a tie breaker. A third founder runs the risk of gravitating towards a more influential founder. Three or more founders also creates complications with equity grants to future investors. So, the answer is, most startups have one to optimally two founders. A few have three. Four or more is extremely rare and detrimental proportional to the number of founders added.

One final note. Investors who simply provide equity should not be considered founders. A clear line must be drawn and maintained between founders and investors. Most often investors who are given founder type authority simply interfere with the business. Investors make decisions that are not always best for the startup itself. This is neither beneficial for the founders or the investors in the long run.

In an upcoming article I will discuss how equity between founders should be divided.