Family businesses – affectionately referred to as Mom-and-Pop shops – tend to inspire a hearty dose of trust and credibility.
In startups, it can be less so.
When you relay your romantic status to a certain type of investor, you may be met with a raised eyebrow.
Jessica Livingston started Y Combinator with her husband Paul Graham in 2005, and the amassed value of their top companies now sits at $300 billion.
Husband and wife team Michael and Xochi Birch made hundreds of millions from Bebo (and then bought it back for $1).
If you ignore the fact that CISCO founder Sandy Lerner was ousted shortly after IPO, and the fact she and her cofounding husband Leonard Bosack divorced shortly after that, the couple started a company that’s now worth $200 billion. And Bosack resigned in protest when she was fired. Romance isn’t dead.
Eventbrite, Canva, Slideshare, Flickr, Oxyzo… the list of couple-founded ventures goes on. Some crashed and burned. But that’s true of many a platonic-founded startup.
There’s nothing to say romantically involved founders have less of a chance than two friends, two brothers – certainly two strangers.
But any couple who’s pitched to a room full of investors will have clocked the gulps or grimaces when disclosing their romantic status.
Is founder coupledom a red flag to VC bulls? Or can it be considered an advantage?
The big question
“Will you marry me?” might define your romantic future.
“What happens if you break up?” might define your chances of getting investment.
If you’re not single, don’t feel singled out. Platonic cofounders will be asked the same question.
We all know cofounder disagreements are one of the most common downfalls of start ups. What your cap table looks like, who will exit and who will remain if the worst happens, and how quickly you can move on with the next phase will lend you credibility if established early.
Having a solid, pre-existing commitment to each other, shared values, and (hopefully) excellent communication can give you an advantage.
And to make a slightly delicate point, spouses can be a problem whether they’re your cofounder or not.
Put more kindly, startups can be a lot for spouses to cope with – or any kind of personal relationship. The physical demands and long days mean little time is left for family. If an uninvolved spouse can’t tolerate that, many founders are forced to make the impossible choice.
But, if your partner was onboard from the start and shares your vision of success for the future, there’s more reason for an investor to believe you’ll both go the distance.
Other big questions
The main thing likely to get in your way is a “no/not in a million years” list. Some VCs have (sometimes sensible, sometimes arbitrary) lines they won’t cross, either out of trepidation, personal bias, or having been burned in the past.
They could include no apps, no marketplaces, no founders under 25, no couple founders.
It’s a rigid and kinda old fashioned way to do business, but it’s something to be prepared for, as are two questions that will almost certainly come your way:
- What’s the long term plan?
This might involve keeping assets in one person’s name. It might be to head up different departments as the business scales. It might be to stay at the helm, it might be to plan for exit.
- What’s the contingency plan if the long term plan fails?
It might look like one partner exiting. One person might hold majority shares and voting rights, with a sidebar agreement outlining the exiting party’s stake.
This is a situation where there absolutely is a wrong answer, namely “both of us”. You might believe you’ll carry on business as usual after a split, but investors won’t.
Love conquers most
Time doesn’t matter when it comes to love. But it does matter in startups. If you’ve been together for less time than the average runway period, expect raised eyebrows. If you’re unmarried, unfortunately, same.
Then it comes to communication style. Respect shines through when couples interact – as does contempt, impatience, and one upmanship. Good chemistry is something you can’t fake.
Finally, you both need to be bringing something to the table. If one is the executor, the innovator, or the salesperson, and the other is shoehorned into a soft role like Head of Happiness or Chief Tea Maker, investors will suspect you’re bringing them along for the ride.
The perfect cofounder is notoriously hard to find. If you think you’ve found The One, don’t be afraid to make your case.
Better to be married to your cofounder than married to your work.
