The solo founder hypothesis

A founders’ first task is to validate her business, not find a co-founder. In the startup world there are two truisms that are regularly aired which deserve questioning. Approach investors once you have a product and some traction Approach investors as a team; a team of two is more appealing than a team of one

Paul Graham from Y-Combinator put it like this;

"WHAT’S WRONG WITH HAVING ONE FOUNDER? TO START WITH, IT’S A VOTE OF NO CONFIDENCE. IT PROBABLY MEANS THE FOUNDER COULDN’T TALK ANY OF HIS FRIENDS INTO STARTING THE COMPANY WITH HIM. THAT’S PRETTY ALARMING, BECAUSE HIS FRIENDS ARE THE ONES WHO KNOW HIM BEST.

BUT EVEN IF THE FOUNDER’S FRIENDS WERE ALL WRONG AND THE COMPANY IS A GOOD BET, HE’S STILL AT A DISADVANTAGE. STARTING A STARTUP IS TOO HARD FOR ONE PERSON. EVEN IF YOU COULD DO ALL THE WORK YOURSELF, YOU NEED COLLEAGUES TO BRAINSTORM WITH, TO TALK YOU OUT OF STUPID DECISIONS, AND TO CHEER YOU UP WHEN THINGS GO WRONG."

He is wrong on the first point.

Just because an entrepreneur has lots of friends it doesn’t mean that any of these are suitable to partner with (skills, experience, aptitude)

At Forward Partners, we’re solving for the second point.

Agreed, starting a startup is hard and you need a support team. The first support doesn’t need to be a cofounder.

In lean startup fashion, we have a hypothesis.

Our hypothesis is that we can repeatedly back solo founders who can create successful businesses with our support.

The help we provide is through our team of experts who assist with customer discovery, coding the first version of the product and attracting the first customers.

By the time the entrepreneur comes to recruit her cofounder (we help with this too), she can do so from a position of strength. With product-market fit established, the founder can attract a higher quality pool of talent and is able to give less equity to the co-founder.

We already well on the way to proving this. At Forward Partners we have already backed 10 companies when there was just a solo founder; 

They received their first equity funding from us pre-product and as solo founders. We’re happy with the progress to date. All have since gone on to build products and teams. We’re now looking for ways to regularly repeat.

To summarise, we believe that at the heart at every company is a great entrepreneur.  We also agree that forming a great team is essential.  With our help, a solo founder has the chance to first validate the business model before forming the team.

There are investors prepared to invest pre-product with solo founders – and right now, we’re one of them.

Nic has worked in venture capital for almost 20 years now and prior to founding Forward Partners in June 2013, was a Partner at leading venture capital firm Draper Esprit.

He has worked and invested in London and Silicon Valley, leading over 25 investments and enjoying a number of successful exits including buy.at (acquired by AOL for $125m) and Zeus Technology (acquired by Riverbed for $140m).

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