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What is a late cofounder, and why aren’t we talking more about them?

April 30, 2024
Augustin Celier
With 14 years in entrepreneurship, Augustin has founded four companies across various sectors, exiting three of them. Uptime, his latest venture, was VC-funded, raised €15 million, and employed 75 people. At Hexa Scale, Augustin aims to use his experience to help linear growth companies get back on the road to exponential growth.

Aside from being billionaires, Elon Musk (Tesla), Eric Schmidt (Google), and Tony Hsieh (Zappos) all shared a unique characteristic: they were late cofounders. But what is a late cofounder? Why do they often act as game-changers, and who is best suited to this role?

We are big believers in the late cofounder at Hexa, but we don’t talk about them much in the world of entrepreneurship. Nor are we even really clear on what they are - are they the same as an early cofounders who join later? Or are they glorified CEOs?

None of the above. We had a resounding success of Alban Sayag’s appointment as a late cofounder at Yousign (HX19), and we’re on a mission to get the message out there: the late cofounder role is a unique opportunity for both startups and entrepreneurs alike - and when the match is right, creates an unfair advantage to put companies back on the path to category leadership.

What is a late co-founder?

A late co-founder is someone who joins a company while it is still young - pre-exit or IPO -  taking cofounder levels of equity, and actively helping to shape it from A-Z alongside the original founding team: its product, teams, GTM, but also its long-term vision and trajectory.

They come on board at the scaling stage, when there’s something big stopping the company from growing to its full potential. The late co-founder gets their hands dirty, getting to work on what’s broken, while always keeping the bigger picture in mind.

They shoot for the stars, roll up their sleeves, tackle problems head-on, and generally just try - hard - but also have an appetite for the nitty-gritty of processes, structures, and management that are crucial for a growing company.

This sets the late co-founder apart. We label people in company building as either ‘builders’ or ‘scalers’—those who are great at starting things from scratch (like early founders) and those who excel at taking something existing and making it bigger and better, which is usually a job for C-levels. The late co-founder is both.

They have the fire of early co-founders, and the discipline of corporate leaders. They are entrepreneurial scalers.

Why should startups bring a late co-founder on board?

I’ve met many founders who have created respectable companies but are missing what’s needed to go from solid to outstanding. The potential is there, but after having been at it for years, grinding, hustling, day in, day out, they struggle to get it to the next step on their own.

Founders tend to be incredibly skilled at the 0-1 phase, but the 1-10 phase is vastly different. When you become a 50-person organization, the daily tasks and challenges are not at all the same, and sometimes, early co-founders, who thrive in the creation and grind, frankly find them quite boring.

A late co-founder can bring the scaling mindset that early founders can struggle (or simply don’t desire) to cultivate. This is exactly how it happened for Yousign when they joined Hexa in 2019.

“I had reached a point in my life where after ten years, I no longer had the same energy. When we met Alban [Sayag], we realized pretty quickly that we had the right one, it was like love at first sight. We all shared the mindset of diving into something completely new” - Luc Pallavidino, Yousign cofounder and ex-CEO

Today, Yousign is the European leader in e-signatures, in big part thanks to the decision to bring Alban on board — and Yousign isn’t the only one. Without Elon Musk and Eric Schmidt, Tesla and Google wouldn’t be the multi-billion dollar companies they are today.

Why is being a late co-founder so unique?

As well as being able to occupy the ‘entrepreneurial scaler’ persona - the sweetspot for a certain (and my) personality type - the role is unique because you’re working with a diamond in the rough.

This means two things. Firstly, that you get to turn a high-potential company around that would otherwise be lost. There are too many valuable companies that are falling to the wayside in light of the unfavorable economic climate. Every one of them is a sadly-missed opportunity, and one that, with the right support, could have made its unique impact on the world. Late co-founders get to make this impact comes to fruition.

Secondly, it means you know for sure it’s a diamond. Early co-founders don’t have the same advantage - there is no certainty that they’re truly ‘onto something’, or that anyone is actually going to like what they’re building. For all they know, they could be working with a shiny rock masquerading as a diamond. That’s the risk of early-stage entrepreneurship.

Joining as a late cofounder gets some of that risk out of the way - by the time you join, the company will usually already have at least €1 million ARR. The potential of the company will already have been scoped by someone else — at Hexa Scale, by me — and you’ll already have a ton of learnings on what did and didn’t work. You get to be an entrepreneur while skipping over the many pitfalls at the beginning.

This doesn’t mean that the role doesn’t have its own challenges. Building at the scale stage is hard, but for different reasons.

“People think with scaling that things won’t be entrepreneurial anymore. And that’s wrong. At each step, you need to reconsider what you're doing. You will have new problems and you will have to solve them. It's a never-ending story” - Alban Sayag, (late) co-founder and CEO of Yousign

When it goes wrong 🫠

The late co-founder’s job is to figure out how to turn their respectable company into a mind-blowing one. While some of the risk associated with company-building is eliminated as a late co-founder, the task is no small feat. At all.

It requires an endless supply of proactivity, curiosity, and outside-of-the-box thinking to 1. reshape an existing company that has been laying its roots for years, and 2. to do it in a way that actually puts it back on the path to category leadership.

A very real obstacle to achieving this is bringing on board the ‘playbook guy’ as a late co-founder. This means someone who “has already done it” and will “just repeat it”. No two startup contexts are the same, and just applying a playbook will dramatically fail. It doesn’t mean that hiring someone senior with lots of experience under their belt will never work, but you need to hire someone without that playbook mentality, with a 100%-agile mindset, with the belief that every new startup is a blank page to write.

When it goes well 🤩

With the agile mindset box ticked, there are still a few things that are necessary to make sure it works. The late co-founder needs to:

  • Have great alchemy with the founders: the power of getting along shouldn’t be underestimated. If no one really likes each other on a personal level but they think it could work professionally, they should run for the hills. Being a late team addition is never easy, and when they need to help implement big changes, it’s important everyone is willing to listen. A key part of this is outstanding empathy and leadership skills.
  • Implement and follow through on clear areas of responsibility: there must be defined decision perimeters in place, and 100% respect of others’ decisions when speaking to third parties (employees, investors and customers) — the “mom vs dad” trap needs to be avoided, when the decision is different based on who you ask.
  • Be as present as early founders: they need to have board presence, investor exposure, and involvement in strategic decisions — otherwise they will be another C-level, and the potential for real growth and change will plummet.

You can find out more about how else we help scale linear-growth companies here, and check out our open late co-founder position here.