For years I’ve helped friends and former business colleagues with their job search. If I find out they are thinking about working for a startup or early stage company, I usually talk to them about the various attributes of a bonus round CEO in case they come across a company that has one. What’s a bonus round CEO? It’s simply a CEO that has already made their retirement money from a previous successful venture. And the more they made the more into the bonus round they are. Sometimes, but not always, bonus round CEOs are willing to take much more risk. After all, if the venture doesn’t work out, they’re already set for retirement.
So what about having a bonus round co-founder? It could be great given the extra been-around-the-block experience. But there’s more to consider than just that. Let’s explore further.
No two “bonus round” business professionals are alike. So you’ll need to dig in a bit more to make sure the one you’re considering for a co-founder is a good fit. Below are some things to explore:
- Were they a founder for the gig that put them into the bonus round? In other words, have they been around that part of the block to understand the issues at the very early stage? If they made their money as a Fortune 500 executive and never spent time running a startup, they could be in the bonus round but without understanding what your world is like.
- If they already have a fat retirement in the bag, why do they want to go through the drudgery of doing a startup gig? Sometimes, bonus round types feel like they have to prove the first win wasn’t just luck. Other times, they tried moving into a semi-retirement phase and realized they were made to build companies. And sometimes they came into the winning venture after it was already established but always had a dream of doing a startup. Whatever their reason, you’ll want to know more about their fundamental motivation.
- Do they understand that they might be willing to put the company into more risky situations than if they hadn’t already made their money? Do they realize that some aspect of this could be good but sometimes it’s either unnecessary or crosses the line for the amount of risk the other founder(s) or employees are willing to take? Remember, if your venture crashes and burns, the bonus round co-founder is still set for retirement.
There’s almost certainly more good than bad from teaming with a bonus round co-founder. Just add the questions above to your due diligence list before you make your final decision.
With any addition to the team at the early stage (ie – first 20 employees), pay close attention to personas and personalities. You don’t want too much concentration of the same persona type because diversity of thinking and approaches can be one of your company’s strongest superpowers. For more on this, see my article titled “8 Personas of Successful Entrepreneurs“.
Also see my related article titled “Avoiding Co-Founder Conflict“.
Wait, there’s much more!!!
The information in this article is just a very small piece of what I cover in my Founders Academy Video Library, which includes more than 35 topic-specific modules and 6 themed compilations.
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