Dear SaaStr: Is 5 Co-founders Too Many When Raising Venture Capital?

Yes, it can work.  My first venture investment was Pipedrive, it had 5 co-founders and sold for $1.5 Billion.

But — it will be a flag.

My recommendation: maybe have 2, or 3 max, of the founders be the “C-level founders” going forward.  For fundraising, and probably, for real too.

Clean up your org chart so only 2 are C-level executives. The others can have their equity, etc. and the title of “co-founder” but ‘demote’ them from the C-level. 2 founders running the company is great. 5 scares most investors off.

This may create some tough conversations. But it will also clean-up the company for most VC firms to invest.  Venture capital is a business of outliers, but it also involved a lot of pattern-matching, for better or worse.  2 co-founders is the most common pattern.

You can see in the chart below, most SaaS leaders at IPO have 2 core co-founders.  Some have just 1, a few have 3 or more.  But most have 2:

If you have 4-5+, maybe just quietly demote them.  Just a little bit.  It just makes sense.

(me+him image from here)


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