Jim Duffy: Two's company to help start-ups achieve success

Jim Duffy says Billions' Bobby Axelrod, played by Damian Lewis, second left, knows the value of a good co-founder. Picture: James Minchin/SHOWTIME

Bobby Axelrod is the primary character who runs Axe capital. He’s the main man, the big cheese, the head honcho who runs a big venture capital fund. He has a nose for a deal and like many who trade in such high stakes he knows that knowledge is real power.

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But, not just his own… Bobby has a sidekick. Well, Wags is more than that; he is Bobby’s lieutenant, his eyes and ears and has a real sense of what needs to get done by the troops outside on the trading floor.

Axelrod knows he cannot grow by himself so he has a close partner who picks up the slack and challenges his thinking.

And this is what every start-up entrepreneur should seriously consider – a co-founder.

If we look back at great founding teams we see many who have two at the helm. Laurel and Hardy, Maverick and Goose, Larry Paige and Sergei Brin and, of course, Bill Hewlett and Dave Packard.

The complementary relationship between these characters boosted the whole show in many ways, while highlighting to us the power of two. So why are we still producing so many new business ventures in Scotland and the UK with solos at the top?

Firstly, it’s not easy finding a co-founder. Like all relationships, that of co-founder has to be real and not feel manufactured. I guess it’s the same in politics. I have no doubt that both Alex Salmond and now our First Minister, Nicola Sturgeon, value the insight, counsel and solid foundation that John Swinney has as a co-founder of their respective governments.

This is a role that Mr Swinney plays very effectively. Whenever he decides to hang up his political gloves for good, his co-founder talents and strengths will be in great demand on many boards and in big business.

But, the point to note here is that he provides a ying and yang to his other halves, while showing leadership himself. And if he didn’t feel it was right for the good of the “business” he would move on.

Secondly, getting a decent co-founder on board is all about timing. Unfortunately, this kind of timing is hard to get right. As a new venture builds and the product market fit is refined, then a great deal of hard work and thought energy is expelled. This then becomes part of the start-up story and part of the culture. Finding a co-founder to co-found with has a big impact.

There is a shared vision, shared sense of fight and shared appreciation of what the business is and can become. If a founder brings in a partner who cannot get to grips with all this stuff quickly once it has been done, then the spaceship may not get off the ground.

For many founders, splitting the company into shares to ensure that the co-founder feels like a co-founder is often a deal-breaker. As I’ve written here before, I’ve seen too many people start a business over a glass of wine and go “halfers”. Investors don’t like companies that go halfers or have their share capital split 50:50 at the outset.

This is why there are so many onerous and cheeky little clauses in venture capital term sheets. These deal with the eventual consequences of one co-founder losing interest in, say, five years and all that can mean for the business and, oh yes – the investors. A co-founder does not need to own half the business. It is fair to give a co-founder a little equity up front, then incentivise them with share options that vest over time as the business grows and does well.

Finally, it’s all about chemistry. I’m sure that Bobby Axelrod could find hundreds of super smart people to replace Wags at the helm of Axe Capital. But, there is only one Wags and Bobby knows that! He’s loyal to the end…

• Jim Duffy is co-founder of The Moonshot Academy and author of Create Special

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