A recent column in Psychology Today put the U.S. divorce rate between 42 and 45 percent. No wonder investors can be leery of backing a company with married co-founders. They fear a failed relationship will kill the business. Should they? An investor and a co-founder whose perspectives make them uniquely suited weigh the pros and cons.
Why might it be harder for married co-founders to find investors?
Vicki Fulop: It was a fairly smooth process for us, but maybe it scares investors because of preconceived notions of people having a relationship before they launch a startup.
Jonathan Tower: Sometimes, the board needs to take action, and how do you do that when the founders are married? Those are complexities you don't find with college roommates.
What strengths might married co-founders bring?
Fulop: You have already committed to a life together. It almost alleviates a little bit of worry because you know you're in it for the long haul.
Tower: There are probably certain things that a husband and wife team won't do to each other. You probably won't find the husband screwing his wife out of stock options.
What can go wrong?
Fulop: We thought we might have trouble recruiting. That's why our first hire was a VP of people and culture. I didn't have a job when we started, and Rich was making a pretty low salary--we had no health insurance and no security.
Tower: Recruiting. Potential hires don't want to be involved in marital spats, and might wonder if the founders are objective enough to evaluate each other's performance and make needed changes.
What financial safeguards do married founders need?
Fulop: If Brooklinen didn't succeed, we were going to move in with our parents, buy emergency health coverage, and find new jobs. But I'm from the former Soviet Union--the worst would still be something I was comfortable with.
Tower: Couples need to know long in advance: What's the fallback plan? Investors need to know that the team is in it for the right reasons, and won't scatter to the winds the first time there is an obstacle.
Coupled co-founders separating have led to major headaches--ugly lawsuits, financial complications--for such companies as Tory Burch, Tinder, Burt's Bees, Esprit, and Wynn Resorts.