Co-founders are the people involved in the initial launch of a startup company. Anyone can be a co-founder, and a co-founder doesn’t necessarily have to have been there from the inception, although that is usually the case. It also does not necessarily include all of the people who were there on that first day. Being a co-founder depends on a wide variety of issues, and not all people agree on these, but in most cases the co-founders are the ones who took the risk and saw the company to some pivotal stage of growth.
Co-founders can also be involved in the initial launch of a company in a new juridiction, as part of a global expansion program, supported by a parent company.
Co-founders are often entrepreneurs, engineers, financiers, programmers, designers, lawyers and others involved in the inception of a new, often disruptive, high-tech company. The right to hold the title of a co-founder is determined by the leader of the team at the time in the company’s inception when it has become viable business. This is usually the CEO or Chairman, but it could also be the creative talent behind the venture.
A co-founder must take the risk of the business failing in order to take credit for the success. That means that they start with very little and may even have put up significant time and resources for the project. People who keep their jobs while helping a startup may not qualify to be a co-founder, even if they contribute and were part of the inception team, as they may not take the risk or devoting substantially all their time to the cause. Some people’s contributions just might not be significant enough to warrant the right to claim the title of co-founder.
There doesn’t seem to be a formal or even a legal definition of what makes someone a co-founder. There are even lawsuits over people making the claim. Tesla, the electric car company, is one such case where there is a dispute over who the founders are. A pre-incorporation agreement or shareholder’s agreement can be used to specify who co-founders are, but these are often executed very early on in the company’s formation. To be a true co-founder, one must stay through the risky and difficult times, not just sign a document.
It matters because being the co-founder of a successful startup has real advantages. Aside from bragging rights and admiration of others, a founder or co-founder might be selected to participate in other promising ventures because of their experience. Companies that survive the early stages to become something that people want to be associated closely with are rare. This experience is extremely valuable and sought after, so being a co-founder just might translate into dollars in the future, and is certainly is an attribute that helps build careers. It would be wise to check with the other founders first to make sure that you qualify. Calling yourself a co-founder when the other co-founders don’t agree can be more of a liability than an asset.