What Is A Founder (Explained: All You Need To Know)

A company founder is a person who came up with a business idea, acted on it, and started his or her own business to turn the idea into a reality.

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What Is A Founder

A founder is a person that came up with a business idea at some point and decided to start a company turning the idea into a concrete business.

In other words, a company founder is a person who started his or her own business.

For example, Jeff Bezos is the founder of Amazon.

He was the first person that came up with the idea of selling books online when the Internet was in its early stages.

Elon Musk is the founder of Tesla.

He was the one who thought of mass-producing electric automobiles.

No matter who may run the business, the company founder will always be the same person.

For example, no matter who may run Google, Larry Page and Sergey Brin will always be known as the founders of the company.

When a company has more than one founder, we’ll refer to them as co-founders.

For instance, Larry Page and Sergey Brin are co-founders of Google.

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What Is A Co-Founder

A co-founder is when a person starts a new company or launches a startup with one or more people.

The reason why they are considered co-founders is that the individuals involved in starting the business are credited with the idea of starting that business and turning it into a reality.

For instance, Larry Page and Sergey Bring are both founders and co-founders as they both came up with the idea of starting Google and they are both credited as having started this business.

Co-founders may have been involved right from the initial stages of the business idea or they could be brought into the business a little later.

For example, a person may think of a business idea but will want to have a technical person join him or her to start the business.

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Founder Roles And Responsibilities 

Company founders are those who turn a business idea into a viable business.

A founder’s main responsibilities are generally to develop a business plan, establish the company’s mission and vision, form the company, form the company’s board of directors, recruit employees, put together the executive team, and find the necessary funding to start the business.

The business plan is generally the first step in evaluating the feasibility of a business idea.

It allows founders to assess the viability of the business idea, understand if there’s a market, determine how the business will function, who are the customers, and so on.

The mission and vision represent the company’s overall objective and reason for existence.

Another key responsibility of a founder is to set up the company and form the board of directors.

The board represents a group of individuals tasked to define the overall strategic pursuits of the company.

With the right structure in place and a solid business plan, the founders will then search for the necessary financing to get the business started.

Financing can be through the sale of equity securities to investors, angel investors, private equity firms, venture capitalists, or other firms.

It can also be through the support of family and friends or traditional loans from financial institutions.

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How Many Founders Do Startups Have

A startup can have any number of founders starting from one all the way to four or five.

However, many venture capitalists and investors consider that having two or three founders in a company is ideal.

When a startup has only one founder, it may be difficult to manage to do everything that is required to start the business on the right foot.

Also, one person may not necessarily have all the proper skills to get the business off the ground.

On the other hand, when you have two or three founders, they can share responsibilities based on their skills and experience.

Also, since they are only two or three, they can still manage to make decisions without running into too many conflicts.

When you have too many founders, that’s when it’s likely that as the company grows, the founders will no longer see eye-to-eye and internal disputes and disagreements may adversely affect the company’s ability to grow.

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Founder vs CEO

The main difference between a founder and a CEO is that the term founder has more to do with describing the history of a company and a CEO is the highest ranking executive in a company mandated to help achieve the company’s objectives. 

A founder is credited for having thought of the business idea and transforming it into a viable business.

A founder can be the CEO at the same time.

In other words, the person who started the business could be the highest ranking executive in the business in charge of running the company.

Another difference is that a company founder will always remain a company founder, it will not change over time.

However, a company CEO can change.

In fact, the board of directors can choose to appoint a new CEO who they believe is capable of achieving the company’s overall targets.

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Takeaways 

So there you have it folks!

What is a founder?

In a nutshell, a company founder is a person who comes up with a business idea and transforms the idea into a new business.

Company founders can start a new company on their own or find other people to help them.

Depending on the company, there can be one or more founders. 

Many consider that the ideal number of founders is two or three allowing them to share responsibilities, bring their combined experiences to the table, maintain good communication, and share the same vision.

If you’re looking to start a business as a founder, are in the stage of drafting a business plan, or are looking for financing, an experienced business lawyer can be a strong ally.

Forming the right team internally and having the right professional support can make or break a business.

Now that you know what a company founder is and how it works, good luck with your business venture.

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