I've noticed there are a lot of new co-working spaces in D.C.. How should I evaluate the different options for my startup?
Coworking has grown quite a bit in the region. Lots of options. Frankly, I think the first consideration is to choose a place that is convenient. If it's not convenient, you won't go, and then you won't benefit from the interactions and serendipity that come from a coworking community. Second, many coworking spots offer services and education events. Depending on where you are with your business events in your coworking space can range from super helpful to distracting/annoying. You'll want to figure out what's the best fit for you. Lastly, you'll need to find a place that fits the growth stage of your business. Almost all the new coworking spots have "open desks." These are great if you are solo. But some coworking spots (like the one I am involved in) also have enclosed offices that can support between 2 and 20 employees. Frankly, I think the beauty of almost all the coworking spaces is that they run on month to month commitments - so it's hard to make a long-term mistake. You can easily hop around until you find a place that fits your business.
What are some resources for funding an early-stage start-up in the DMV region prior to the Angel funding stage?
Prior to seeking angel funding, you'll likely find funding in two places: 1) the government and nonprofits and 2) your friends and family. Concerning the first, government/nonprofits have funds that they are willing to place as grants to businesses that somehow help the public good. Examples include businesses that advance science, medicine, education, or the general welfare of the public. The great part thing about this type of funding is that it's non-dilutive. The downside is that there is likely a long application process to secure funds. If this first option isn't available to you, then the only other place to find funding is amongst those who love and trust you. Hopefully, you don't need too much help to find these people. Angel investors like to see that you have gone this route for funding prior to seeing angel dollars because if those who love and trust you won't invest in you, why should they [angels]?
Jason-- I've been working on a startup off and on for a few years now. I'm ready to take the next step in developing the business and need a partner. What are some ways I can meet people and network with those who may want to join my team? Does Uber Offices offer networking events? Also, what are some key traits I should be searching for? -- Dan
Hi Dan. Great question. Yes, UberOffices has networking events. That's one good way to possibly meet a co-founder, although I've seen it work less often from a one-off event. At UberOffices, I've seen members join up to create a business after they were sitting next to each other at their desks working on their own projects and got to talking over a few weeks or months. There is also a business called CoFoundersLab, which is a local company that specializes in this problem of finding a co-founder. Frankly, I think finding a good co-founder is as hard as finding a spouse (or life partner). You'll probably spend more time communicating with this person every day than you will your spouse. You'll go through tons of stress with this person (probably the same amount as with your spouse :-)). Business is super hard, and a co-founder can make that better or worse. I think there are 3 must-haves in a co-founder: 1) Trust, 2) Equal work ethic (otherwise jealousy seeps in), and 3) Different but complementary skill sets (e.g., sales person and technical person). It takes a long time to find someone with all three characteristics. Take your time. Don't leave it to chance. If you do, you will regret it. Lastly, I don't think a co-founder is a must have. Sometimes you can just hire around the issue. Many times this is a better plan in my opinion and leads to less stress.
I see you are a co-founder in 2 startups. How do you go about splitting up equity share when starting the company? Is there a formal agreement? Did you and your co-founders have any disagreements to overcome with regard to equity share before moving forward with the business idea?
First, having two startups is like having two wives - it seems like a good idea . . . I actually regret having two startups simultaneously. Because I split my time, I find that I don't do either job to the best of my ability. I didn't plan for it to happen, but the way the timing worked I ended up in two businesses at once. And I love both.
You must have a formal agreement if splitting equity when starting a company. I strongly recommend that such agreement include a vesting schedule in the event that the co-founders' primary contribution to the company will be sweat (time spent working). There have been many articles written about this, so I won't reiterate the points made in them. But if you are looking for problems in the future, start a business with a co-founder without a formal agreement with equity vesting structure.
Disagreements about equity splits prior to starting the business are natural, healthy, and in my opinion, essential. You and your co-founder are typically nice to each other during the pre-company stage. The first real friction will come when discussing the equity split. And that's the moment you really find out who your co-founder is. How does s/he handle conflict, stress, etc.? This is a great time to find this out. The best thing that could happen is that this process gets really conflicted, you agree on a resolution, and then you move forward like nothing ever happened. Anything less? I'd recommend a different co-founder.