Is It Time to Rethink the Stigma for Tech Companies Led by Couples?
Romantically involved tech company co-founders are having a good year.
In the past four months of big-ticket tech exits, Wildfire, co-founded and led by the engaged couple Victoria Ransom (CEO) and Alain Chuard (head of product management), was bought by Google for at least $250 million; Michael (CEO) and Kass (COO) Lazerow’s Buddy Media sold to Salesforce for $745 million-plus; and LinkedIn purchased married couple Rashmi Sinha (CEO) and Jon Boutelle (CTO)’s SlideShare for $119 million.
Asked about the trio of hits, Michael Lazerow told me: “I guess this proves that successful companies are built by teams who love and respect each other, versus teams who hate each other. If you can’t work with people you love, who do you work with, people you hate? Hopefully, this puts an end to any talk that backing couples is risky.”
500 Startups investor Dave McClure, who backed both SlideShare and Wildfire, told me his portfolio includes probably a dozen companies founded by couples. “A year or a year and a half ago, we realized there were a huge number of couples in our portfolio, and they were actually some of our best companies,” McClure said.
500 Startups doesn’t invest in companies because they are run by couples, McClure said, but it benefits from other venture capitalists seeing that as a risk factor.
“Because they don’t want to invest in couples, we probably get a better deal,” he said.
Why don’t VCs like backing married couples? Wouldn’t a tightly aligned duo that’s willing to mix their work lives and home lives normally be an asset? In fact, this is actually such a commonly cited concern that people are quite willing to go on the record about it.
“All partnerships have the potential for conflict, but married business partners have a superset of the problems of traditional business partners,” wrote Josh Hannah of Matrix Partners, on Quora. As examples, he cited the possibility for lack of tough feedback when one member is underperforming, the potential for couples to team up against a dissenting view, and the possibility of a messy divorce.
Meanwhile, Jonathan Tower of Citron Capital wrote in a Fortune op-ed that “the bias in traditional venture circles against investing in such startups is long-standing and rooted in some uncomfortable realities.”
His big concerns? Overly emotional relationships, recruiting difficulties and lack of defined roles.
Of course, every firm rule comes with significant counter-examples, and the companies of married couples backed by VCs past and present have included Cisco, VMware, Eventbrite and ModCloth.
“Investors doubted us always,” said Buddy Media’s Lazerow. “But married couples don’t have a monopoly on investor doubt. We were more than happy to prove them wrong. We’ll see if they doubt us next time around.”
Plus, the intersection of family and tech company is less verboten than it once might have been.
Well, SlideShare’s Sinha was not only a pregnant CEO with her married co-founder, but she delivered twin boys and then sold her company four months later.
“It’s been a very exciting six months,” she said.
(Image courtesy of mudcards on Etsy)