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Category: Startup

Difference Between Co-founder and Founding Member

This is my definition. Co-founder is someone who can understand your vision and give well-thought-out opinions that sometimes conflict with yours but help the startup differentiate itself from others in many ways.

On the other hand, a founding member is much more like operator who only believes in a vision thrown by the founder(s) and executes the tasks that are only relevant to his/her professional field.

The first thing you as entrepreneur have to do before formulating a startup is to find co-founders, not founding members. If you think you already have co-founders, think of above criteria and ask yourself a question “Do I really have a co-founder?”

If you find yourself making all strategic decisions alone or finding your prospective partners being not up to the mark where you cannot get the level of feedback you were expecting, you don’t have a real co-founder.

Your prospective partners might be able to give you lots of ideas and opinions, but these are so instant that you already thought of once or already have the answers.

I wouldn’t say it’s easy to find a co-founder who has ready-made ability to excel your level of thinking. However, I believe this is super important and very critical to the company’s success in the future.

What if you find yourself having only founding members? There are three ways to solve this. 1) Educate your founding members to become co-founders. 2) Look for someone else. 3) Dismiss your startup and start with other idea that is easier for people to understand.

At my recent startup I’m not following the latter two approaches yet. Instead, I’m sharing with my team members lots of information, sometimes too much, that I find useful on a daily basis. These information include updates from the competitors, new startups doing similar things, investor’s comment on industry trends, etc.

Someone might argue that giving too much information only introduces a chaos or creates an impression of the founder being not able to decide anything. I think that’s wrong because the environment surrounding a startup changes constantly and people in startup have to adjust them to new environment very quickly by consuming whatever information relevant to them. Otherwise, they will lose.

Startup Weekend is a great place to meet aspiring entrepreneurs and passionate people with startup mindset. Perhaps, at the same you have to realize that not all of them are qualified to be real co-founders especially at the moment you meet them for the first time.

Whether or not they can become real co-founder is completely up to you.

Venture Finance Intro

When I co-founded my first startup, I had almost zero knowledge about venture financing but I’ve gained a lot of knowledge about it for past 5 years.

So what is venture financing anyway? For those who read TechCrunch, Mashable or any other tech news websites you’ve certainly heard of a phrase like “Company X raised Y million dollars from VC firms A, B and C.” You are seeing it as the result of company that executed some kind of venture financing.

While it’s obvious to anyone above phrase indicates a company in question did raise some amount of money from investors, many things behind the scene that made the deal happen are still unknown to most people.

Let’s take an example of valuation. Valuation is the value of company and it is often used to determine what percentage of your company you want to give away for how much money when taking investment from someone. If the valuation is $10M and you are getting $2M investment, basically you are giving away 20% of your company.

However, in venture financing world a word valuation really means two things, namely pre-money valuation and post-money valuation. A former is the value of company before the event of investment and a latter is the value of company after it.

These two things sound similar but their outcomes are very different so an experienced entrepreneur always ask his investor a question “Do you mean post-money valuation?” in order to make sure the investor is referring to the value of company after the event of investment, not before it.

This is just one of the fundamental things you as an entrepreneur have to be knowledgeable about when raising money and we are just scratching its surface here. If you want to gain these kinds of knowledges and understand how venture financing works, I would recommend that you read a book called Venture Deals written by Brad Feld and Jason Mendelson.

I also recommend that you read both authros’ blog websites. Not only their blog articles are valuable to those aspiring entrepreneurs but also the comments from other entrepreneurs are considered to be pure gems. I’m personally a big fan of both authors and their websites.

This book is still valuable even if you decide to bootstrap your own startup so get it and read it.

Startup Weekend Kyoto

My first experience attending Startup Weekend turned out to be great.

After I gave an initial pitch to the audience, 8 people decided to join me amongst 60 or so attendees. We spent exactly 54 hours to develop our product from scratch while having so much fun doing so. Lots of laughs, excitements and even pivots.

On the last day I gave another pitch to the audience, including the judges in front of us this time. Though I was sure that the concept of our product will stand out from others, I was certainly surprised when one of the judges actually gave us $10K investment offer right after I finished my presentation.

Our team won the final prize, which included:

1) Eligibility to participate DEMO Asia 2012 in Singapore
2) Two air tickets
3) 3 months free rent of incubation space
4) $200 worth credit of Amazon cloud services
5) Lots more

Things just got started. Looking forward to the excitements we’ll see in the future.