Co-Founder Dating: Try Before You Buy - The Importance of Trial Projects
Find the right partner by employing this trial period arrangement. With 65% of startups failing due to co-founder conflict, choosing the right co-founder can literally make or break your business.
“Hi Annie, I’m starting conversations with potential co-founders. Any tips you can share?”
I get a version of this question at least once a week from founders, and every time I share the below framework on trial periods that YC Startup School created.
The best thing you can do for your partnership early on is to put clarity and expectation-setting above all else. The startup world is inherently uncertain, so take the control back where you can - and in this case, you can! Keep reading for a tactical guide to structuring fair and informative trial projects.
What is a Trial Period for Potential Co-Founders?
The trial period has 3 parts:
I. Names & Intentions:
We’ll start off with the easy stuff - outline your names and your intentions for this trial period. For example, “We intend to work together on the following project to determine viability as potential startup founders”
II. Timelines & Accountability:
Date Range: How long are you planning to trial your partnership? I’ve seen ranges anywhere from 1 to 6 months. I wouldn’t recommend anything shorter than 1 month (or ~120 hours of working together) as this is the minimum length of time to understand how you work together.
Workload: How many hours are you expected to commit per week? This does not need to be an equal workload, for example if one is full time and the other is part time that can work so long as you define this up front (how many hours does part- versus full-time mean?) and have it reflected in the ownership / compensation part of the agreement.
Decision Point: Schedule a meeting at the end of your project and define the agenda to that meeting when crafting the agreement. For example, “we will discuss whether or not we want to continue working together”.
[Annie’s Addition] Check Ins: I would add in a regular cadence for quick check ins to share appreciation, feedback, and generally check in on your respective experiences as founders and co-founders. This gives you insight on how the person can support you not only functionally (skillset-wise), but also emotionally and socially.
III. Project Details
Project Description: Brief, simple overview of the project intent. Make sure this is a project with clear definition and activities, and one where you can make meaningful progress in the time you allotted for the trial period.
Goals & Deliverables: Clearly define the tasks and activities required to meet this goal. Once again, discuss if this is feasible to do within the agreed upon time period and workload.
Ownership & Compensation: Perhaps most importantly, you’ll want to take some time up front to align on ownership and compensation in light of the two potential outcomes -
1/ If we decide to work together, or
2/ If we do not decide to work together.For compensation during a trial period, the options I think about are:
Cash compensation (ideal if you can manage it) - arrange a contractor agreement with a set pay schedule,
Dynamic equity via Slicing Pie platform - Website and Handbook Excerpt - this is the platform that dynamically splits equity over time based on contribution (like hours worked, capital provided, etc.),
No cash or equity, just good faith. It’s possible that someone is willing to put in a few weeks of work for the potential of finding a great partner and company to work with.
I hope this tactical guide to structuring fair and informative trial projects is helpful, if you’d like to chat more about it - you can schedule a quick chat with me here.