While a startup needs more than one voice and brain, the number can also become too big if companies aren’t careful. Now you may be thinking “what about PayPal?” and it’s true that there were six founders including Peter Thiel, but remember it was originally a software security firm that merged with an online banking startup called X.com, founded by a guy meme lover and world’s richest person Elon Musk. That is the definition of a lightning in a bottle situation that is unlikely to ever occur again.
Two to three seems to be a sweet spot for the number of founders. There are multiple brains to bounce thoughts off of, reinforce good ideas, and kill bad ones in the crib. In cases of three founders, there is the added benefit of a tie breaking vote for especially difficult decisions. Two or three founders can easily have the drive and passion to move the business forward, while still having enough skin in areas of primary importance so as not to see responsibility get watered down.
We’ve already discussed that knowing who the founders are is one of the key variables in my startup investing decisions, but it is important to also consider the number of founders. I want my companies to have a balance between too few voices to generate great ideas, and too many voices that can cause confusion and infighting. Yes, it’s another variable to add to the seemingly endless list that investors have to consider with new companies, but it is an important one that I consider.
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