The survey of 156 founders, primarily from early-stage VC-backed tech companies, reveals a crisis brewing beneath the surface. Here’s a deep dive into the key findings:

A Mental Health Epidemic Among Founders

The past year has been particularly challenging. Valuations have plummeted, investors have tightened their purse strings, and the pressure to achieve profitability has intensified. This economic downturn has created a perfect storm of stress for founders, many of whom are sacrificing their well-being to keep their ventures afloat.

• Nearly Half Struggling: A staggering 45% of founders reported experiencing poor mental health, with burnout, anxiety, and depression being common issues. This highlights the immense pressure founders face, constantly juggling fundraising, product development, team management, and the ever-present threat of failure.
• Stress Overload: 85% of founders surveyed admitted to experiencing high levels of stress in the past year. This chronic stress can manifest in various ways, impacting sleep, relationships, and overall well-being.
• Exhaustion and Insomnia: The relentless pace takes its physical toll as well. 55% of founders reported suffering from insomnia, highlighting the difficulty of switching off and achieving proper rest.

Work-Life Balance? What Work-Life Balance?

The survey highlights the devastating impact on work-life balance. Founders reported decreased exercise, unhealthy eating habits, and significantly less time for family and friends. This constant state of hypervigilance can lead to insomnia, as evidenced by the 55% of founders who reported sleep disturbances.

• Sacrificing Personal Well-being: According to the survey 57% of founders reported decreased exercise compared to the previous year, while 42% admitted to neglecting healthy eating habits.
• Strained Relationships: The intense focus on the startup can leave little room for personal life. 64% of founders reported spending less time with friends and family, potentially leading to relationship problems and feelings of isolation.
• Missing Out on Life: Over half (62%) said they had taken fewer vacations than usual, further contributing to the feeling of missing out on life experiences.

Feeling the strain of founder burnout? See if you qualify for membership to join Founders Network.

Funding Challenges and Investor Pressure

Fundraising, unsurprisingly, emerged as the biggest hurdle for founders, followed by work-life balance and achieving profitability. However, the survey revealed a troubling disconnect between founders and investors. Over half of the founders received no support from investors regarding their mental health, and some even felt exacerbated pressure due to “board expectations.”

• Capital Constraints: The survey identified fundraising as the most significant challenge faced by founders, followed by achieving work-life balance and profitability. The current economic climate with tighter investor scrutiny adds to the pressure.
• Lack of Support from Investors: Over half of the founders reported receiving no mental health support whatsoever from their investors. This lack of empathy can exacerbate feelings of isolation and stress.
• Feeling Like a Number: Some founders even felt pressured by board expectations and questioned whether their investors truly cared about them or their vision. This perception can be incredibly disheartening and demotivating.

Founder Conflict: When the Dream Team Implodes

Adding fuel to the fire, the survey found that dozens of founders were considering leaving their startups due to disagreements with their co-founders. The intense pressure and long hours can exacerbate personality clashes and strategic differences, ultimately leading to a breakdown in the founding partnership.

• Disagreements Leading to Exits: Dozens of founders revealed they were considering leaving or had already left their ventures due to disagreements with their co-founders. A strong co-founding team is crucial for success, but personality clashes and differing visions can lead to conflict and ultimately, breakups.
• Stressful Power Dynamics: Trying to manage a “visionary” co-founder’s spending habits was cited as a source of tension by some founders. Finding a balance between creative freedom and financial responsibility can be a delicate dance.

Leaving the Startup Grind Behind

The consequences of this mental health crisis are severe.  A staggering 61% of founders have contemplated leaving their startups, and nearly half (49%) are actively planning an exit within the next year. This exodus represents a significant loss of talent and innovation from the startup ecosystem.

The survey also explored what founders might do next. Taking a break was the most popular option (39%), followed by seeking employment (30%), or starting a new venture (28%).  Others envisioned writing a book, pursuing consulting, or even a well-deserved beach vacation.

The findings of this survey are a wake-up call for the entire startup ecosystem. The startup mental health crisis demands that prioritizing founder well-being is no longer a luxury; it’s essential for sustainable success.

Feeling the strain of founder burnout? See if you qualify for membership to join Founders Network.

“I wouldn’t have jumped into startups unless I had gotten cancer,” Patrick says. 

The serious health issues he experienced in his twenties, while scary, helped him prioritize and inspired him to take risks. 

In 2012 at age 24, Patrick founded ProfitWell, which helps subscription companies optimize their pricing and retention. Today, more than 30,000 companies – including Canva and MasterClass – use ProfitWell products. ProfitWell was acquired by payments infrastructure platform Paddle in a deal valued at more than $200 million. 

In a Founders Network global keynote on Jan. 18, Patrick shared insights from his 10-year journey growing his company to where it is today – and the challenges he encountered along the way. 

Check out his full keynote from January 18

or explore our entire event video library

The Clarity of Illness 

Though a cancer diagnosis is terrifying – especially at such a young age – Patrick believes his health challenges pushed him to become a founder. 

At the time, he was working at Google and became fascinated with pricing, which, despite its importance, was in the hands of entry-level employees like himself. He wasn’t enamored with the bureaucratic culture of a large company and wanted to launch his own startup. 

“It just prioritized things. Some founders, when they have kids, they prioritize their lives so much better. They’re so much more productive after kids, because they have to be. They have to snap their calendar,” Patrick says.

Having multiple serious health scares in your twenties is clarifying in another way: it changes your relationship to the idea of death. 

“You sometimes don’t really think through that until you’re middle-aged,” Patrick describes. “I realized I was going to die, which was a dramatic thing. And, I was like, okay, let me get my shit together.”

Choose Your Friends 

Patrick’s journey to becoming a founder started in his early twenties. While he quickly achieved success in the startup world, he was still learning the lessons of your average young adult.

Prior to his diagnosis, he described himself as an insecure person who sought love from anyone willing to provide it. He quickly realized that, in order to succeed, he would need to surround himself with people who support him. 

That meant shifting his focus from friends who were disappointed by his schedule or his inability to go out late like his peers. Early in his relationship with his now-wife, he remembers opening up about what he wants his future to look like. She was on board. 

“I love dedicating my life to a mission. That was a big thing. And, then I was basically finding people who were supportive of that – the good and the bad,” Patrick says. 

Bootstrapping Mistakes

Plenty of founders advise their peers to avoid venture capital, because it requires founders to cede ownership of their companies. But, bootstrapping has its downsides, too, Patrick notes. 

“I think I regret bootstrapping as long as we did. If you’re trying to create a great, independent cash-flowing business, I think bootstrapping is great. But if you’re trying to build a big company, I think you’re going to have to get on the VC treadmill at some point,” Patrick says. 

While bootstrapping gave ProfitWell the opportunity to make revenue without ceding ownership, the company grew at a slower pace as a result of funding choices. 

In his webinar, Patrick covered: 

• How cancer changed his priorities 
• Building a supportive network
• The key to launching a mission-driven startup
• A founder’s guide to bootstrapping

To learn more about overcoming adversity and the challenges of growing a company, see if you qualify for membership and check out the keynote from January 18.

Before he was born, he was diagnosed with Hanhart syndrome, a rare condition that affects limb development. His parents were told their baby had a 30% chance of survival. 

“The decision my parents made in that moment was to focus on the 30% chance of me living versus the 70% chance of me dying,” he says. “When you identify how the brain works, what you focus on in your life, you get more of.”

This lesson is at the heart of Santonastasso’s work as a speaker. Through sharing his unique story, he trains professionals around the world how to reach their full potential. In 2018, he released his first book, Victim to Victor: How to Overcome the Victim Mentality to Live the Life You Love. 

On. Dec. 14, Santonastasso hosted a webinar for Founders Network where he provided his strategies for personal and professional success. 

To learn more about mindset awareness check out the webinar from December 14 or explore our entire event video library

Learn from Mentors

Santonastasso started out his career as a bodybuilder. 

During one of his competitions, he shared the story of his disability and was approached by someone who told him, “You’re going to be on stage with Tony Robbins one day.” That early supporter believed in the power of Santonastasso’s story and pushed him to make a career out of it. 

At 21, Santonastasso didn’t know who Tony Robbins was. So he looked him up and attended his first Robbins event. As Santonastasso watched Robbins captivate an audience for hours at a time, he knew he wanted to do the same. 

He looked into Robbins’ background and started to study what Robbins studied, from neuro linguistic programming to timeline therapy and hypnosis. 

“There are a lot of gurus and teachers out there, but 99% of them haven’t had to overcome the physical and mental things that I’ve gone through, and so I have a unique perspective on overcoming specific things and obliterating specific challenges,” he says. 

Do You Understand Your Mindset?

During his lectures, Santonastasso takes participants on a journey, informed largely by his study of psychology. 

He starts with the psychological limitations of the human brain. 

We are naturally predisposed to focus on threats, failures and insecurities, says Santonastasso. As a result, change is challenging, because your brain disincentivizes risk. 

“The big idea is: look at me. I have no legs, one arm, and I built a business, ” he says. “I have the cars; I have the house; I have the amazing relationships; I have the body that I nurtured. But I’m not different. The only thing that’s different is I’ve trained my brain to act a specific way, and you can do it, too.”

To reach this conclusion, he leads audiences to examine their emotional states and invites them to visit their younger selves to heal past trauma. 

Practicing What You Preach

Even therapists have therapists. 

When Santonastasso started preaching to others how to optimize their mental capabilities, he was forced to look inward and examine his own relationship to himself. 

Like the people he encounters in his audiences, he’s also on a journey of self-love and compassion, especially after his brother’s death from a drug overdose two years ago. 

To maintain his inner stability, he has some non-negotiables. They’re like guardrails he practices on a day to day basis for the health of his mind. That means moving his body, consuming valuable information and being very intentional about the company he keeps. 

“So, I’m constantly practicing what I preach, but I also fall off my wagon. I’m not perfect,” he says. 

In his webinar, he covered:

• Identifying where you live emotionally
• Training your brain to be happy 
• How to extract wisdom from the past
• Addressing mental health

To learn more about mindset awareness, see if you qualify for membership and check out the webinar from December 14.

In the next year and a half, he raised nearly $150,000 to support his social justice-oriented mission: increasing mental health resources for people in prison. 

Through Like YOU!, which he started in early 2021, Young aims to partner with state prisons, juvenile facilities and county jails. The startup is designed to connect incarcerated people with culturally relatable cognitive behavior therapy via smart tablets already available in most of these facilities. 

Young will be among the speakers at this year’s fnSummit 2022, Founders Network’s annual fall conference. The event connects founders, investors, and partners in the startup ecosystem. In a fireside chat, Young will share his unique story and how he navigates the startup world as a Black man and formerly incarcerated person.

Here’s a peek of his startup journey. 

An Uphill Battle

During Young’s sentencing hearing for low-level drug crimes in 2014, he delivered a powerful speech – articulating his knowledge of subjects from American history to economics – to convey to the judge that he had what it takes to succeed. He hadn’t been afforded the same opportunities as the other people in the room. But, if given the chance to be released, he had the aptitude and the curiosity to pursue his aspirations. 

The judge at the hearing was so impressed that he resigned in protest of the mandatory sentencing laws that required him to give Young a long sentence. The judge’s resignation led to national attention and eventually Young’s release in January 2021. 

“You have to be willing to ask questions. You have to be able to learn, to absorb the information so you can then turn around and apply it,” Young says. “That is one of the main things I did the whole decade I was incarcerated. That is what led to the judge being so impressed at my sentencing speech.”

A Personal Mission

The inspiration behind Young’s startup Like YOU! is deeply personal. Two years before he was arrested and incarcerated, his brother died by suicide at the age of 20. The brother had served as Young’s surrogate parent. Young spent his decade in prison regretting that he hadn’t been able to intervene to help his brother. 

“I kept thinking about the intersection between mental health and technology,” Young says. “And I kept thinking, how could I have helped my brother and how can I help others?”

He focued his passion for mental health on his own environment, where resources were extremely limited. There were only three mental health professionals for 1,500 people in the prison. 

“So if somebody ever needed to talk to them, you can imagine, they didn’t have the time,” he says. 

That’s not uncommon. In fact, the shortage of mental health professionals in U.S. prisons is so dire, the national average is one therapist per 200 incarcerated people. 

Fundraising Challenges

Young’s startup is designed to reduce recidivism and provide incarcerated people with the tools and education to perceive the world differently. Many tech founders in the startup ecosystem who have attended elite schools often graduate with financially powerful networks that can be tapped during rounds of startup fundraising. However, Young has had to find creative ways to raise the funds to make his dream a reality. 

“A lot of those founders, their family and friends round can easily reach $300,000 to $500,000. That is not normal amongst most families of color,” Young says. “Most of us don’t have the network that other founders have.”

So, for Young, bootstrapping and finding creative ways to save money are critical. For example, he’s struggled to hire, as it’s difficult to pay early employees salaries. Instead, Young is using vested equity to compensate his two full time employees.

—

fnSummit 2022 encapsulates the Founders Network experience, giving startup founders the opportunity to learn from other tech founders in the startup ecosystem, build deep relationships with investors, and uncover solutions to the challenges they’re facing. The annual event provides the perfect setting for off the record discussion, reflection, and networking.

Learn more about Founders Network see if you qualify for membership

In Blue Ocean Strategy, authors W. Chan Kim and Renée Mauborgne describe how companies can carve out their own niche. The authors discourage founders from competing in preexisting market spaces, which they call “red oceans” for their cutthroat, bloody competition.

Rather, they suggest that new businesses should find their own “blue ocean.” This term describes an untapped, uncontested market with few competitors and high levels of consumer demand.

Creating your own “blue ocean” is significantly easier said than done, of course. But the rewards for finding the right market are well worth the investment. Ideally, your customers will be so excited about your products that they’ll handle much of the marketing for you.

Social media websites like Reddit are an excellent way to generate buzz among a hungry audience. With more than 400 million monthly active users, Reddit is one of the most popular social media platforms in the world. However, it often receives less attention from marketers than websites like Facebook and Twitter.

Building a Reddit community for your business can be one of the best ways to do organic word-of-mouth marketing. Below, we’ll go over how to create a Reddit community for your business.

How do you make a community on Reddit?

Reddit is divided into smaller communities known as “subreddits,” each devoted to a particular topic or purpose. As of writing, the website hosts more than 2 million subreddits and over 100,000 active communities. For example, the /r/movies subreddit is a hub for discussing everything from blockbusters to indie films.

Users can make posts (which consist of links, pictures, or text) in a subreddit, as well as comment on those posts. To express their approval, users can “upvote” a post or comment, and can also “downvote” to express disapproval.

Subreddits such as /r/popular or /r/all collect recent posts from across the website that have been highly upvoted. Users can also curate their own Reddit front page by subscribing to subreddits. In this case, the Reddit home page will display only posts from communities to which the user is subscribed.

What about creating a subreddit for your own business? The purposes of having your own Reddit community include:

• Posting interesting, engaging, or humorous content related to your products
• Getting suggestions and feedback from users
• Answering questions and solving issues
• Holding contests or drawings

Before creating a subreddit, you’ll first need to have a Reddit account. In order to deter spammers, this account must be at least 30 days old. In addition, the account must have some amount of positive “karma” (the number of upvotes it has received). The exact number is kept hidden, but users suggest that the score is between 50 and 100.

Next, click on the “Create Community” or “Create your own subreddit” button on the Reddit home page. (Which button you see depends on whether you’re using the new or old Reddit interface, respectively.)

You’ll need to define a name for your subreddit. This name may contain up to 21 characters and will determine the community’s URL. You’ll likely want to set the subreddit to public, rather than restricted (with posts only from certain users) or private.

Other settings you can define for your subreddit include:

• A short tagline and description of the community (which appears in users’ search results)
• The subreddit’s theme and appearance (including logo, colors, background, and font)
• The community’s rules

In particular, subreddits must have moderators who enforce the community’s rules. Reddit administrators may close communities without human moderators at any time. Once you’ve created the subreddit, you can define other Reddit accounts as moderators. Make sure that you have multiple moderators, so that the community can survive events such as founders leaving your startup.

Is a community the same as a subreddit?

The terms “subreddit” and “Reddit community” are often used as synonyms, but there’s an important distinction between them. A subreddit is simply a sub-forum of the larger Reddit website that has been created for a specific purpose. However, not all subreddits can truly be called “communities.”

For instance, certain subreddits restrict their submissions so that only approved users can post. Perhaps the most visible example is /r/announcements, which only allows posts from Reddit administrators. Also, these posts may or may not allow comments from standard Reddit users, depending on the post author’s choice.

Given these limitations, it might not be entirely accurate to call the /r/announcements subreddit a true “community.” Instead, the term “Reddit communities” is better applied to subreddits with a healthy amount of monthly activity. This includes multiple community members who are actively participating in the subreddit and interacting.

In other words, your own “blue ocean strategy” should seek not just to create a subreddit, but to create a community. Your Reddit startup community should attract people who are passionate about your products and services, organically building a user base.

Are you wondering “what is a co-founder” or “what is the difference between founder and co-founder?” In this article, we’ll explain the most essential points of distinction.

Can a company have both founder and co-founder?

It’s entirely possible for a business to have both a founder and co-founder. In the startup community, a founder is a person who establishes a business, turning profitable ideas into actual profit. The founder sets up the business infrastructure and works to get it off the ground.

Entrepreneurs who launch a business by themselves are known as “solo founders.” If multiple people are involved in the company’s launch, however, then they may all receive the title of “co-founder.”

In some cases, companies may have both a founder and one or more co-founders. The assignment of titles depends on the precise timeline of when you hire early employees.

For example, suppose that you create a startup by yourself, giving you the title of “founder.” Several months later, you decide to find a co-founder to fill in some gaps in your skill set. In this case, you could properly be called the startup’s “founder.” However, your business partner would be called a “co-founder” (but likely not a “founder”).

On the other hand, suppose that you decide to create a startup with two of your classmates from business school. In this case, all three of you were involved from the project’s onset, giving you all the title of “co-founder.” However, it wouldn’t be proper to refer to any of you as the singular “founder,” since all of you had a hand in founding the business.

If you are currently looking for a chief of staff job opportunity, understanding these distinctions can help you navigate the startup landscape and identify the role that aligns best with your skills and aspirations.

Is founder higher than co-founder?>

Given the different situations described above, it’s possible (though not certain) that a startup founder is “higher” than the co-founder.

If a startup has both a founder and co-founders, this likely means that the founder was the company’s original creator, while the co-founders were added later. For example, many startup founders have a great business idea, but need a technical co-founder who can help execute it. These people thus look for potential co-founders who can help complement their skills.

But in what sense can we say that startup founders and co-founders are “higher” than each other? There are two possibilities:

• One person has more equity in the business than the other. This is often the case when co-founders join the company at different times. The original founder takes the largest share of equity, while later co-founders and employees receive a smaller share depending on their level of contribution.
• One person is higher in the business hierarchy than the other. Co-founders usually assume a role on the company’s executive team, such as the CTO (chief technical officer) or COO (chief operating officer). Highest of all is the CEO (chief executive officer), as we’ll discuss in the next section.

Who is higher, CEO or founder?

The status of “founder” or “co-founder” denotes a historical fact about who was responsible for creating the business. As such, these are permanent titles that can’t be revoked later on.

The CEO, meanwhile, is the highest-ranking employee in the business. This person is responsible for making top-level strategic decisions to execute the company’s vision. Importantly, being a CEO is a job, not a permanent title.

Unlike the CEO, the status of “founder” does not grant a person any formal authority within the business. Indeed, many founders have parted ways with the business they created after disagreeing about the company’s direction.

Of course, a single person may serve as both founder/CEO, especially in the startup’s early days. As the company reaches maturity, however, the founder often takes a back seat and hands the reins to another CEO.

This doesn’t mean the founder disappears entirely from the business, though. Founders and co-founders can still assume other roles such as board members, shareholders, and even employees.

Just one example is Google co-founders Larry Page and Sergey Brin, who formerly served as the company’s CEO and president, respectively. They are still controlling shareholders and also remain members of the Google board of directors.

Startup entrepreneur and investor Marc Andreessen has defined product/market fit as “being in a good market with a product that can satisfy that market.” Reaching product/market fit means that you’re familiar both with your customer base and with the major needs and problems they have.

How does product-market fit for a startup?

Achieving product-market fit should be one of the foremost goals of your startup’s product team. It’s an essential quality that startup investors will look for. Conversely, the path to startup success is lined with failed companies that struggled to reach product-market fit.

What is UX in product-market fit?

User experience (UX) refers to how customers interact with your products and services, and the experience they have while doing so. In order for users to love your product, it must fulfill UX criteria such as:

• Useful (meeting your audience’s needs)
• Usable (efficient and easy to use)
• Findable (able to be discovered by your target audience)
• Credible (trusted by customers and experts)
• Desirable (with an attractive brand and design)
• Accessible (able to be used by a wide range of people)
• Valuable (clearly defining the benefit you receive)

There are several different UX metrics to measure product/market fit. One common heuristic is to measure the percent of users who would answer “very disappointed” if they could no longer use the product. When you ask users “How would you feel if you no longer had access to this product?”, at least 40% of users should respond “very disappointed.”

How does Superhuman find product-market fit?

CEO Rahul Vohra is the founder of Superhuman, a startup that claims to be “building the fastest email experience in the world.” For example, the Superhuman email app offers dozens of keyboard shortcuts to help users search, label, filter, and send messages more quickly.

Superhuman built a product-market fit engine to automate the process of measuring product-market fit. This included:

• Conducting UX surveys among the app’s users
• Separating users into customer segments based on their responses
• Analyzing the collected data
• Making changes based on this analysis and tracking the results

This automated approach to product/market fit can help startups identify hidden insights and gaps in their knowledge. For instance, your company may actually be targeting users who aren’t as enthusiastic about your product as the “true customers.”

In particular, Superhuman encourages startups to focus on their so-called “high-expectation customers” (HXC). These individuals are the ideal customer for your business that you might imagine when you close your eyes. Think about questions such as:

• Which type of people most needs my products and services?
• Why is your product important to these people, and how will your product help?
• What kind of experience do you want people to have with your product?

Superhuman is just one startup that has excelled at reaching the right product/market fit. For more advice and best practices, get in touch with your connections in the startup community.

One figure, in particular, is crucial to know: the average startup CEO salary. Because CEOs are usually the highest-paid employee, drawing a salary that’s too large can drain your financial resources. On the other hand, startup founders and CEOs deserve adequate compensation, like any other member of the business.

Knowing the average startup CEO salary is crucial to determine proper compensation for your employees. Below, we’ll investigate some of the factors that go into the average annual salary of a startup CEO.

How much does a CEO of a startup make?

Startup executive compensation can be difficult to assess fairly, especially when CEOs are in charge of setting their own salary. You need to strike the right balance during life as a startup founder—not living in the lap of luxury, but also not eating ramen every night.

Some in the startup community believe that CEOs should draw a modest salary, at least for companies in the earlier stages. Entrepreneur and venture capitalist Peter Thiel, for example, believes that the best predictor of startup success is a low CEO salary:

“The lower the CEO salary, the more likely [a startup] is to succeed. The CEO’s salary sets a cap for everyone else. If it is set at a high level, you end up burning a whole lot more money.”

Thiel also estimated that the average annual CEO salary for companies in the seed stage was between $100,000 and $125,000.

This opinion is backed up by data from career websites. According to ZipRecruiter, for example, the average salary for the position of “startup CEO” is just over $110,000 per year. Salaries ranged from the 25th percentile of $43,000 to the 75th percentile of $156,000, with the 90th percentile at $274,500.

Another study by Kruze Consulting found that the average startup CEO salary was $146,000. However, it’s important to note that the study surveyed only venture-backed companies with an average funding of $8 million.

Below are some of the factors that may influence a startup CEO’s salary:

• Company stage: CEOs at an early-stage startup may have a lower salary than those at a late-stage company. This is especially likely if the early-stage startup is a part-time passion project.
• Funding and cash flow: How does funding impact the salary of startup CEOs? Companies that have raised more money, or that have already started to turn a profit, can afford to pay their CEO more.
• Location: As a general rule, salaries are higher in places with a high cost of living, such as Silicon Valley, New York City, or London. (These areas also tend to be where many tech companies are clustered.) However, the growing trend toward remote work may alter this equation. Startup CEOs who telecommute from a cheaper location may be willing to draw a lower salary.
• Industry: Startup CEO salaries may also depend on the company’s industry, which influences how much funding you can raise. For example, tech founders working in sectors such as AI or biotech are usually better-paid than startup founders in industries such as agriculture or education.
• Company culture: Some startup CEOs may draw a low salary to set an example for the company and establish a culture of lean efficiency. By paying less in salary and more in equity, CEOs can also incentivize themselves and their employees to ensure a successful exit.

What is typical CEO equity in a startup?

Of course, salary is just one part of a startup CEO’s total compensation package. Equity, too, is an important consideration for how much startup CEOs are paid. So how much startup equity do CEOs typically receive?

When determining CEO equity, one important factor is founding status. Is the CEO also a founding member of the startup, or has this person been hired after the company gets off the ground?

Startup financial advisor David Ehrenberg suggests that 5 to 10 percent is a fair equity stake for CEOs who join the company later. Research by SaaStr backs up this suggestion. The average founder/CEO holds roughly 14 percent equity at the company’s IPO, while an outside CEO holds an average of 6 to 8 percent.

This discrepancy is because startup founders begin by holding most or all of the equity in their company. However, these initial holdings become diluted over time as more employees join the startup and as the company raises venture capital. Founders who serve as CEO thus hold more of a stake than CEOs who were not part of the founding team.

CEO equity and salary are typically inversely proportional to each other. Startup CEOs who draw a larger salary may choose a smaller equity stake to compensate, and vice versa. Additional equity stakes may also be part of the CEO’s compensation—for example, an extra 1 percent in equity for each year as CEO.

Still, there’s no “one size fits all” answer here, and most startups are open to negotiating both salary and equity. CEOs who are considering joining a startup should know how to evaluate a stock option grant and other parts of their compensation package.

However, this romantic image of starting a company from scratch, all by yourself, doesn’t always work in reality. That’s why many startup founders look for a co-founder who can help fill in any gaps.

But do you need a cofounder when starting a business, or can you build a successful startup as a solo founder? In this article, we’ll discuss if your startup needs more hands on deck, and if so how and when to find a co-founder.

Is a co-founder necessary?

If you really want to forge your own path as a single founder, then you’re certainly welcome to try. According to a study based on Crunchbase data, 46 percent of companies that raised over $10 million in funding had a solo founder. (The remaining 54 percent had two or more founders, indicating that either option is viable.)

In many cases, however, finding a co-founder is a smart decision. Below are a few reasons why:

• Amount of work: A solo founder needs to wear many hats, including that of startup CEO. You’ll be in charge of hiring employees, product development, fundraising, and more. Bringing a co-founder on board can help you distribute this massive workload and breathe more easily.
• Different skill sets: Running a business is a multifaceted affair, and not everyone is talented at every part of it. Co-founders can offer complementary skills, such as technical expertise or business problem-solving, that make up for places where you’re lacking.
• Greater credibility: In the eyes of investors, having a founding team often makes you more credible than being a solo founder. For example, one study found that startups with a single founder took 3.6 times longer to scale the business than did startups with two founders.

Do I need a co-founder for a startup?

We’ve discussed some objective factors about having a startup co-founder. But how do you know if you, in particular, should find a co-founder for your business?

First, the issue of emotional fortitude is often overlooked when starting a business. Building a startup will challenge you and take you out of your comfort zone at times. Having one or more co-founders at your side can help you weather the storm, provide support, and overcome obstacles.
Of course, this presupposes that you’ve chosen the right person to work with. If all goes well, you’ll be establishing a long-term founder relationship that will last years. Make sure that your choice of co-founder is someone whom you can tolerate (or even enjoy) working with for long hours.

Hiring a co-founder is one of your startup’s most important team-building actions, so you should treat it with the appropriate weight. If you’re looking to add a co-founder, there are multiple options available, including:

• Sourcing candidates from your connections in the startup community.
• Using “founder dating” websites that seek to match potential co-founders with each other.
• Posting on general career websites such as LinkedIn, ZipRecruiter, and Indeed.
• Posting on startup-focused websites such as AngelList and Y Combinator.

The traits you should look for when finding a co-founder include:

• A shared passion and curiosity for the startup’s mission and vision.
• Solid interpersonal chemistry and compatibility, helping to establish a singular company culture.
• A knack for growing the business, whether through technical product development, hiring the right employees, or speaking with venture capital firms.

So what if you want to make being an entrepreneur your long-term career path? You’ll need to have a winning business model and beat the odds. Various analysts have estimated that startups fail at a rate between 30 and 80 percent.

So what separates a successful startup from other companies that fall by the wayside? Below, we’ll discuss some of the most essential tips for startup success for any entrepreneur building a business.

What is the best advice for first-time entrepreneurs?

Your first time running a small business can be both exciting and challenging. Fortunately, your odds of success are much higher if you consider just a few tips and best practices. Below is some advice for entrepreneurs to help you build a successful startup.

1. Don’t worry about taking risks: Becoming an entrepreneur is an inherently risky profession, and it’s not for everyone. Successful entrepreneurs are able to embrace and lean into this risk. They accept the possibility of failure in exchange for the chance to pursue their passions.

There’s nothing wrong with preferring the stability and peace of mind of a regular paycheck. If fear of failure is holding you back, however, then being an entrepreneur may not be the right personality fit.

2. Go after your passions: Your choice of business niche should ideally be something you’re both passionate and knowledgeable about, especially for your first time as an entrepreneur. This is for multiple reasons:

• Being knowledgeable about a subject, or having prior work experience, gives you skills and connections that can help you out.
• While being an entrepreneur is still tremendously rewarding as a whole, the daily grind can be discouraging. A topic that interests you will make it easier to put in the work for your business to succeed.

3. Carefully craft your business plan: Picking a field that interests you is essential for startup success — but so is having a good idea and a solid business plan. As founder and CEO of your startup, make sure that your company will actually help in solving a real problem.

Before getting too far, perform some in-depth market research about the niche you want to enter. Who are your main competitors, and what is the unique value proposition that separates you from them? Who is your target audience, and what do they look like in terms of demographics, psychographics, and spending power?

4. Start thinking about money: Advice for entrepreneurs often focuses on

However, it’s never too early to consider how your business is going to raise funding, as well as your long-term profit model and cash flow. Without tracking your income and expenses, it’s all too easy to spend beyond your means and run out of money.

In particular, start preparing your presentation to prospective investors, as well as the thirty-second “elevator pitch” for your business. These should discuss factors such as:

• Your company’s mission and goals
• The problem you want to solve
• The unique products and services you offer

What advice do entrepreneurs give for starting a business?

Every successful startup founder was once a first-time entrepreneur. Reading advice from startup founders who were once in your shoes can help motivate you through difficulties and obstacles.

Christina Wallace, director of Startup Institute New York, encourages founders to connect with many different people in the startup community:

“By all means, develop relationships with mentors and more senior, experienced people, but also foster relationships with people just one or two steps ahead of you. Ask them the ‘stupid’ questions and the things that seem silly or small.”

Rob Hayes, partner at First Round Capital, believes that startups should focus on hiring above all else. By recruiting the right people, founders can stop spreading themselves too thin and delegate more of their tasks:

“People will come in and tell me they need to hire three customer service reps and my first thought is, ‘Why not hire someone to manage those people first?’ If you do that, you only have to focus on one awesome hire, not three.”

Étienne Mérineau, co-founder of the conversational AI platform Heyday.ai, urges startup founders to “think like a customer” by placing their audience first:

“The single condition for having a real business is to have a paying customer. If someone is willing to pay for your idea, it means your solution solves a real problem. This is why you need to think and act like a customer-first company from day one.

Test your assumptions on real clients with real needs in the real world. Don’t spend too much time strategizing, because real-world feedback will either crush your initial idea or force you to tweak it in order to be viable.”

When it comes to tech startup advice, many entrepreneurs suggest focusing on efficiency and quick, iterative improvements to get to market faster. Paul Buchheit, the creator of Gmail, encourages startup founders to look for a “90/10 solution.” In other words, can you get 90 percent of what you want, with just 10 percent of the work that you’d need for a “100 percent” solution?

How do you motivate yourself as an entrepreneur?

The advantages of being an entrepreneur are hard to deny. You can be your own boss, set your own schedule, work on what interests you, and create new job opportunities. However, this also means that entrepreneurs need to be self-starters and highly ambitious in order to run a successful business.

To stay motivated as an entrepreneur, founders should follow the below tips for startups:

• Set your own goals: When you created your business, what was your driving purpose, and what objectives did you have for yourself? Creating SMART (Specific, Measurable, Achievable, Realistic, and Timely) goals can help you understand what you should be working on next. Don’t be afraid to reward yourself with a fancy dinner or vacation upon reaching a major milestone.
• Keep learning: Running your own business is a golden opportunity to always be learning about new concepts and ideas. Expanding your horizons will help your business grow and your mind stay sharp as an entrepreneur. This may include finding hidden insights about your industry or expanding your technical skill set.

Prioritize your health: Entrepreneurs’ flexible schedule means that it’s all too easy to overwork yourself and cause burnout. Don’t neglect important health factors such as sleep, nutrition, exercise, and daily routines. Foster personal relationships by surrounding yourself with a small group of supportive people.