We’ve heard it so many times before: a startup’s founding team is key to whether investors will back it or not. In a previous edition of Investor Talk, all of our investors said the founders themselves are what makes or breaks a pitch. So today we’ve asked our experts just how many founders is ideal in a startup, from an investor’s point of view.
Oliver Drews, chief executive officer (CEO) of Clifftop Colony Capital Partners:
“In terms of co-founders, the answer is three to six. Two works but my observation is that the magic is starting to happen at three. Beyond six it becomes a bit too dysfunctional for the team to work efficiently.”
Andrea Bohmert, partner at Knife Capital:
“I would say three is the ideal number but it is also important that they have different skill sets.”
Brett Commaille, co-founder and lead partner at AngelHub Ventures:
“Two to three seems be a solid number. It’s rare to find all the qualities needed to grow a strong business in one individual. We all have shortcomings and finding somebody who is strong in those areas is critical. Teams that have complementary strengths and a track record in their area of focus are ideal. There are always exceptions, but a strong team seems to be more common that strong individuals.”
Dan Guasco, co-founder at Team Africa Ventures
“Two founders we believe to be ideal.”
Paul Cook, founder and managing director of Silvertree Capital:
“It obviously depends from case to case, but typically I’d recommend between two and four.
The tradeoffs are: too few, and the burden of managing all the various aspects of running a business becomes too heavy. Also founders typically represent sources of cheap skills, finance and network, so that is valuable in the early stage.
Too many founders, on the other hand, increases the risk of disagreements and the time spent on communication. At least as important is the long term economics of the business: startups sometimes forget that to be really sustainable, they need to be able to eventually pay their founders a market-related salary or dividend return plus additional return for foregone salary during early stage. So a large founder team requires the startup to work on a project with a big potential market.”