Founding Team Size

I’ve been asked many times through the years what the ideal founding team size is. Arbitrarily, the common answer seems to be 2-3 people.

After being an angel investor as well as a venture investor for the past 5 years, I’ve come to realise that the real question should be, what is the ideal team size for a founding team to enable the fastest decision making of the highest quality. After all, the reason startups win against incumbents is to that startups tend to get to distribution faster than big co incumbents get to innovation.

I do find it dogmatic and arbitrary when investors tell me that they never invest in single founder companies just because (albeit you can argue the key man risk becomes significant), or when they say they don’t invest in teams with more than x cofounders. Going back to first principles, why does that matter when the founder(s) had demonstrated a history and track record of making high quality decisions and executing? Alibaba for one famously had 18 cofounders!

I am pretty proud at SeedPlus I’ve invested in single founder companies (Nicki At CardUp) and companies with 5 cofounders (Rukita from Jakarta, Indonesia) and I’m glad to say both companies are executing pretty well at least from a team perspective.

So, Founders – when you are thinking of building out your founding team, think instead of who should you be partnering with to enable the best decision making ability, with speed, over time, because that is a huge competitive advantage if you get that right.