Founders, no matter their role, always face the challenge of being pulled in far too many directions. From building investor relationships to raise funding to hire, management, developing a vision, it all adds up. The reality is the more things you do the harder it is to do each thing well.
That’s why finding a technical cofounder can be such a boon for your startup. It lets you focus on the areas where you can have a greater impact. Also, it helps with giving the technical side of your business a big heads up. But finding the right blend of technical, managerial, and personal qualities for this role is tough.
Below, we break down what you need to know to find the right technical co-founder. Do so without wasting time and energy going in the wrong directions.
Differences between a technical cofounder, CTO, and technical partner
Let’s begin by getting our terms straight. You need to be very clear about the role you’re looking for to avoid confusion, hurt feelings, or simply incorrect expectations.
- Technical Co-Founder: This person will (obviously) be a cofounder of your company and therefore should have some equity and equality. They will have ownership of the technical side of your business.
- CTO: A Chief Technical Officer is an employee who you hire to manage the technical side of your business. They are a senior member of your team. They won’t be a co-founder though and may or may not have equity or profit-sharing.
- Technical Partner: This is an entire team that many founders hire to handle all kinds of development. Doing so avoids the costs and time needed to hire an internal team. It can also help mediate the need to find a technical co-founder.
Be aware that whichever you choose, you’ll need someone who can help you evaluate vendors. Afterward, he or she would need to choose the right tech stack, and generally represent the technical side of your product in investment meetings. Keep in mind that these are the major functions you’ll need from a technical hire early on.
So when you’re thinking about whether you need a CTO, technical co-founder, or technical partner, there are a few elements to consider. The first is whether you need an individual or a team (in which case you should look more into hiring a technical partner). If you’re considering hiring a tech cofounder vs a CTO, it’s mostly about how difficult this person will be to find and therefore what kind of incentives they will need.
Chances are you won’t have the funding to pay a quality CTO what they could earn elsewhere, so offering a cofounder role and some equity (just be sure it’s vested) will allow you to hire higher-quality talent. So be sure you enter the process with a realistic idea of what role you need and what it’s going to take to attract the right person.
How to find a technical co-founder
If you’ve determined that you do need to hire a technical co-founder, it’s time to find them. The first place to start is simply in your networks. Ask around in your circles and ask your investors if you have any. Personal connections are generally a good place to begin this kind of relationship. This is generally a fast (and free) way to begin finding some good candidates.
Related to personal connections, you can begin your search by going to events. They are usually held at local co-working spaces, tech-hubs, and general networking events. Sites like meetup.com can also help you quickly find some good events to attend.
On the other hand, if the ask-around approach isn’t working, it’s time to start using other tools and platforms. Two easy places to start are in the r/cofounder channel on Reddit, or similar channels on Discord or Slack. That said, these areas are open to anyone and so the quality may vary. So while you might get lucky, you can expect to save some money and waste some time taking these approaches.
Another strategy to try is using more dedicated tools like CoFoundersLab or FoundersNation. These tools can be free or paid, but in either case, their focus can help you avoid spending more time than necessary building a list of prospective candidates.
Meeting co-founders
Once you’ve found some candidates, it’s time to meet, evaluate, and determine whether any of them might be a good fit. The first thing to focus on isn’t actually their technical credentials or experience, it’s how you get along with them. Ask yourself whether this is a person you could trust and would be okay working with. Ultimately, many other issues can be resolved but hiring a technical co-founder with who you don’t get along isn’t a recipe for success.
If you like a candidate, have them meet with other team members and/or investors to get their feelings as well. Of course, you also need to evaluate their technical abilities. Just be sure to also evaluate how they are as a manager because being a technical co-founder is just as much about hiring and managing talent as doing more direct technical work like coding.
The best way to approach this is with a set system and set of criteria. Bias in the tech world is an enormous problem. Оne of the most effective ways to avoid hiring someone who’s just like you (and therefore less likely to spot issues you miss) is to be rigorous about using a structured set of criteria to evaluate candidates. So have an open mind, be honest about your own biases, and you’ll likely hire a better candidate.
How to find a CTO
If you think you can afford to hire a CTO instead of a co-founder, then the first place to start would be internal. Hiring from within is cheaper. It ensures the person is more of a known quantity and generally lets you hire more quickly. On the other hand, you need to be aware of the dangers of the Peter Principle.
If you decide you need to hire externally, chances are you don’t yet have an HR department to handle this for you. In this case, be aware that it’s going to take a lot of your time personally (so be prepared). On the other hand, you can always hire a recruiter, but that’s not necessarily going to come cheap. In either case, be aware of how much capacity vs cash on hand you have.
Regardless of the approach you take, be sure you start with specific job requirements. Then, have a clear timeline to avoid the process snowballing. With these, you can build a shortlist, start meeting candidates, and hopefully make a decision soon. Just be sure to treat all candidates with respect to ensure you don’t burn any bridges or create a negative reputation.
CTO salary and equity
Once you’ve found the right candidate you need to decide how to compensate them. It’s a basic reality that few startups can afford market competitive salaries, so you need to find other ways to compensate a senior hire like a CTO. In most cases, this comes down to finding the right balance between salary and equity.
Consider the motivations of the hire and how you can use compensation to augment them. This is your chance to ensure you and your CTO have aligned interests. You can find an amazingly detailed breakdown of the process of hiring engineers (which applies well enough to CTOs) from Ycombinator.
How to find a technical partner
This is an option, not enough founders really consider. Instead of spending all of that time hiring for a single role like a technical co-founder or CTO, you could use it to hire an entire team in the form of a technical partner. Here you can evaluate prospects using many of the same criteria, technical abilities, flexibility, and generally how well you and your existing teamwork with them.
Consider whether you want a technical partner to be closely intertwined with your internal team (read, based in the same city or country as you) or whether working at a distance is okay. This will narrow or widen your options substantially so it’s good to know early on.
Also, be sure to ask whether you can speak to current and/or previous partners they’ve worked with to get an outside perspective on them. If the technical partner is hesitant to share these contacts, that should be a red flag. Lastly, know what you’re looking for. Do you want a technical partner who can gradually give way to an internal team as you grow or one who can grow with you? Check out our full piece on choosing a development partner for more tips.
Consider how you can access relevant skills
Whether you’re looking at hiring a CTO or a technical co-founder, you need to consider how you’ll evaluate their technical skills. Without deep knowledge in the area, it will be difficult for you to get a feel for whether they really know their stuff. So try and ensure you have some criteria and perhaps even a trusted advisor (perhaps someone connected with an investor) with the background needed to help you evaluate.
Dealing with equity
As mentioned earlier, equity is a key question when looking to bring on a technical partner, CTO, or a technical co-founder. One key difference is that while most co-founders or CTOs will expect it, a technical partner will generally be more flexible. They may offer the option to engage in some risk or IP sharing as a way to offset the initial costs of working together while your startup is worried about runway and raising its next round.
Before you begin negotiating with a prospective technical partner, read up on the various ways you can structure a partnership agreement. This is just as key as finding the right partner because it helps ensure your interests are aligned. After all, a technical partner isn’t just another subcontractor. Their role is more critical and integral and should be treated as such.
What it comes down to
In the end, you need to be realistic about what options you have and what you can offer someone to get you the technical know-how you need to succeed. Pretending you can get away without sharing equity with a co-founder or that you’ll be able to find the perfect CTO in two months isn’t going to help.
Finding the right candidate or team starts with being on the same page as other investors and co-founders. Do so by leveraging your networks, and being straightforward about what you can offer and what you need. From there, with a little bit of luck and some determination, you’ll be on the road to success.
