Should Founders Juggle More Than One Company?

A VC declared on Instagram that founders with active roles in several companies is a “MASSIVE” red flag for him, sparking off a big debate.

As a serial entrepreneur and occasional investor, I struggled with this question when I saw it in my Instagram feed.

On the one hand, I do agree that trying to run more than one company concurrently is a massive effort that increases your odds of failure, especially in the critical zero to one stage.

On the other, having been a struggling bootstrapped founder myself I do understand that many founders have side hustles until they get funded or their main startup turns profitable.

So I threw the question to my network of over 30k followers on LinkedIn, many of whom are investors and founders.

Within 24 hours, the responses were fast and furious, and one in particular drew more likes from netizens than my main post itself.

Multiple investments vs multiple active roles

Keir, as you might suspect, is one of those founders with many active roles on his LinkedIn profile, including part-time and contract roles, as well as CEO, Founder, Board Member and even an Internship position listed!

His brief comment drew replies from both sides of the argument that made valid points. But I think the main distinction here is that being an investor is very different from being a founder or key executive. Professional investors should rightly diversify their portfolio in terms of quantity as well as type of companies, but that shouldn’t be the case for a CEO role.

The differences really comes down to:

• Contributing money, advice and connections vs driving vision, team and operations
• Attending occasional board meetings vs being there everyday to run the business

What does Musk, Jobs and Ashton Kutcher have in common?

Of course, at this point some netizens bring up the examples of Elon Musk and Steve Jobs who successfully founded and ran several blockbuster companies concurrently.

One reply also mentioned Ashton Kutcher as an example of a celebrity who could juggle multiple endeavors at the same time and still be very successful.

The obvious caveat in this argument is that these folks are geniuses and anomalies. VCs these days like to bet on trends and norms rather than make contrarian moves, so trying to be an anomaly usually doesn’t register well with them. (See my other article “The Crowded Restaurant Theory and Why VCs Get It Wrong”)

What is less obvious, though, is the fact that examples such as these three examples share the following in common:

• They all became wildly successful in their original venture and primary area of competency before starting and running multiple companies concurrently.
• Because of their first success, they have deep pockets and capable people willing to work for them from the get-go.

I guess if you fall into such a category of founders, you shouldn’t have too much trouble convincing VCs you have a good chance of running several companies at the same time and growing them to the scale that VCs are looking for when they invest.

Practice what you preach?

The argument got even more exciting after some of the respondents dug up the protagonist’s CV.

Alex Iskold, the VC who wrote the original Instagram post, is a man of many accomplishments and multiple endeavors himself.

Iskold is both a successful founder and VC, so one cannot really argue that he doesn’t know what it takes to succeed on either side of the table.

Some netizens argued that he himself is guilty of being involved in multiple ventures. However, based on his LinkedIn profile, this argument is also weak because:

• He is the founder of a non-profit organization that does philanthropic work.
• His only other part-time role apart from co-founding and running his VC firm is that of a coach at Harvard Business School for an entrepreneurship program.

One respondent dug up his Crunchbase profile and argued that he had five board roles. But that also seems like a weak argument given that most folks who are highly esteemed in their communities or industries tend to be on the boards of many organizations. This is again, very different from owning and running several businesses concurrently.

The real reason why a founder shouldn’t run several companies…

Based on my experience, there is one clear and good argument why founders shouldn’t run several businesses at the same time — when you are a co-founder, and not a solopreneur.

I’ve met one founder who felt that a big reason why his past two startups failed one after the other were because his co-founders never took the plunge to go full-time into the startup.

While he worked full-time on it and slogged, his co-founders played it safe and held on to their day jobs, constantly delaying the promise to quit and drive the company together.

Needless to say, he now no longer wants to be a part of any co-founding relationship where any co-founders were not 100% committed to the startup.

Equity split and personal circumstances aside, I’ve had the same problem in my first startup, leading to my shareholders firing and buying out my co-founder. So yes, juggling multiple jobs is problematic in a co-founding relationship.

Of moonshots and lifestyle businesses

I guess at the end of the day, after reading all the responses to my LinkedIn post, my own thoughts are as follows:

1. Many ordinary folks achieve success in owning and running multiple businesses. However, a distinction must be made between what VCs like to call ‘lifestyle businesses’ vs the disruptive, category defining ‘moonshot ideas’ that they are looking for. One must also take into account the fact that VC’s want to be able to exit within 7–10 years, so they’d prefer their investees not to be distracted even if they are very capable and talented.
2. If you are gonna do side gigs as a way of sustaining yourself until you find success in that one, true passion, let that reflect on your CV by not emphasizing it on your LinkedIn profile and distracting would-be investors or partners.

To all the founders out there, good luck in pursuing your dreams.

I have moved to writing on Substack. Please visit www.3linepitch.com.