When launching a business, it may be a better idea to go it alone, despite what many experts say.
Statistics show that startups with successful exits have an average of 1.72 founders, according to CrunchBase and TechCrunch. A successful exit is generally considered when a small business goes public or is acquired by another company.
Small businesses with one founder garnered a 52.3 percent success rate, higher than startups with more than one founder. Success rate went down exponentially with the addition of each founder.
The data came from more than 6,000 startups, which revealed the amount of founders has a somewhat substantial effect on success rate.
A venture capitalist writing for The Wall Street Journal, Ed Zimmerman, prefers “multiple founders because I view the ability to attract co-founders as a proxy for the ability to recruit great hires.”
Paul Graham, creator of American seed accelerator Y Combinator, which has an inherent business structure of promoting startups, lists a single founder as the prime mistake that kills startups.
Even though some contend that a co-founder is necessary, the statistics show that this may not be exactly true.
Zimmerman says that when deciding to fund or not, investors like himself tend to “focus on the dynamics between co-founders” like if they talk over each other or if they are broadly disrespectful of one another; a problem that naturally cannot occur with a singular founder.
But the author of the study still states that his opinion is “2-3 co-founders is probably the way to go” even though the data suggest “that if you fail to get a co-founding team together, it doesn’t necessarily mean all hope is gone.”
Zimmerman professes that “there will be too many stressful moments and too much rejection to handle alone,” but while this line of reasoning makes sense on the surface, it relies more so on anecdotal evidence rather than scientific.
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