Technical Co-Founder vs. CTO – What’s the Difference?
There’s a big difference between hiring a CTO (Chief Technology Officer) and finding a technical co-founder for your company. Since almost every technology business has this problem, it’s worth exploring what each term means and how the search for each of them differs.
What’s a Technical Co-Founder?
The key point about a technical co-founder is that they are, well, a co-founder. They are there at the beginning when you’re scratching the idea out on a napkin. They are as heavily invested in the idea as you are. They spend their nights and weekends thinking about it when it’s nothing more than an idea.
Generally a co-founder is someone you already know. You’ve either worked with them at a prior company, or you went to college with them, or have some other longer-standing relationship. The issues of trust, personality “quirks”, and other pluses and minuses are already well-understood. You have a really good idea of what it’s going to be like to work with them day in and day out.
They also get a large chunk of the company because they put in the time and effort early on. The actual split is up to you and the other person to figure out, but you both feel an equal burden and opportunity to make something great together.
I also think the term technical co-founder is a bit tired. You wouldn’t call yourself a sales co-founder or a marketing co-founder. They’re just a co-founder, and their area of expertise is technology / building software.
What’s a CTO?
A CTO is very different, primarily in how you go about finding them and their relative stake in the company. A CTO is someone you go find after the idea is well-formed and you need the skills of a senior technologist. They are one of the first, if not THE first, employees of the company.
The day to day duties of a technical co-founder and a CTO are very much the same. They both:
- Are heavily vested in the success of the company
- Own the responsibility of building the product and hiring / managing the team as it grows
- Provide strategic thinking on the business itself
However, because you typically have hired the CTO, there are going to be some key differences.
A CTO
- Isn’t typically anywhere near equal owners in the company with you, though they will have a good-sized option grant
- Is usually making some kind of salary, even if below market rates, to compensate for less equity
- Is not on the board
- Isn’t necessarily someone you’ve known before
Why Does All of This Matter?
Many technology startup founders believe they are looking to find a technical co-founder, but in reality they’re looking to hire a CTO. The mindset, the process, and the expectations are completely different.
If you start the conversation by saying you’re looking for a co-founder, the person you’re speaking with will immediately make the assumption that they’re in for a sizable chunk of the company, approaching an equal split with the other founders. It’s human nature.
If, however, you make it clear that you are filling an executive role on the team, there are well-defined norms for what that person can expect from the offer.
Just Remember
The day to day responsibilities of a technical co-founder and a CTO, particularly early in a company’s lifecycle are almost identical. Both are expected to take the technical reins and drive the product development successfully.
However, a co-founder is just that: a founder who was with you at the beginning and was instrumental in bringing the idea from the ether into something tangible. A CTO is someone you hire onto the executive team as an early, key employee.
If you keep this key difference in mind, it will help you in every conversation with prospective key early team members.
Your Assignment
Have you been struggling to find the elusive technical co-founder? Have you framed the discussion with prospects perhaps incorrectly? Try changing the conversation to be about hiring a CTO, and have a clear job description, equity slice and compensation package in mind before you even start your search.
You’ll find that prospective candidates respond well to clarity in their role, and it will put the conversation on well-understood grounds.