Investors always look to de-risk an investment as far as possible. For startups there are typically boxes that remain ‘unticked’ as the business is embryonic. If we had to tick every box we would never do any investments.
Startups are H.A.R.D. It is a long, often stressful and uncertain road that is too often glamourised by the tech media as being easy.
Because startups are so challenging a partnership is so much more attractive, then the burden is shared and each can give the other support. In addition there is also a ‘backup’ person should anything happen to the solo founder, the business and our investment is more than likely gone.
EC1 Capital has invested in solo founders in the past but post investment we have quickly moved to try to find other co-founders to join the business. Sometimes this can be difficult for the original founder to find someone who they can get along with and are aligned and some may not want to give equal equity but it is something we strive to put together.
Conversely, having too many founders can be a worry as for example with four equal founders they are starting off with 25% each of equity, once you add an option pool and go through a few rounds of financing each founder can be down to single digits of equity and then motivation can become a challenge as well as causing a pressure point with later stage investors.
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