The Big Question: Should executives be elevated to co-founders?

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Food delivery platform Swiggy said on July 13, 2021 that it has promoted Phani Kishan, its Vice-President for Strategy and Investments, to a co-founder role to deepen its management bench.

The move to elevate a top executive to founder is a growing trend among Indian start-ups, to reward talent and recognise core members of the team. While founders traditionally are known as those who start the company, startups have been broadening their founder pool as they grow. Companies such as Zomato, Rebel Foods, HomeLane and Housejoy have also done this in the past.

But should executives be elevated to the status of founders or is this title sacrosanct? Moneycontrol put this question to 5 stakeholders in the startup ecosystem to find out:

Here's what they said-

Jaydeep Barman, Co-founder and CEO, Rebel Foods:

After the first few years I realised that while Kallol and I had founded Rebel Foods, my outlook towards the term 'founder' changed completely. A founder is not a designation, it is an attitude and an approach.

Personally, I believe there are five qualities that make a person a founder. First, put the company ahead of self. Second, the ability to hire people at compensations higher than their own. Third, the willingness to sacrifice personal linear career ambitions, to take up challenging new projects critical for the organisation's betterment. Fourth, they have no qualms in reporting to a peer, if that's what the company needs. And last, they are ready to commit the prime of their life to the company through thick and thin, if the need arises, without a question, without a thought."

We have Raghav Joshi, Sagar Kochhar, Soumyadeep Barman, Ankush Grover and Ankur Sharma who started as executives, and are today Co-founders, Rebel Foods.”

K Ganesh, founder, GrowthStory

Startups are a living, growing, evolving entity. As they navigate through opportunities and overcome challenges, they pivot and morph.

Very often in best and worst of the times, the DNA, the skills and expertise needed change. So, having new co-founders at different stages of the company is a great step in positive direction. It is fair to acknowledge the contribution, build for future with new co-founders rather than just go by historical narrative of who were the first people who started the company.

We have done so multiple times in the past, be it Vaibhav Tiwari at Portea Medical, Tanuj Choudhary in HomeLane, Sanchit Gaurav in Housejoy.

Punit Shah, partner, Alteria Capital

It's not uncommon for the founder group in a company to be expanded even after the company has achieved a respectable product market fit. In rare cases, for good reason, even companies post Series B may see an expansion of the founder group largely for safeguarding and getting a better shot at goal in the next 6-8 years.

While it’s a sensitive topic, sharing a founder tag is generally approached with maturity and less of insecurity. It is typically done to draw a fine balance between experience and problem solving without baggage’’, to balance between exuberance and thoughtfulness.

Such constructs have played out well when chemistry, mutual respect and motivation have formed the backbone of decision-making for both sides and its lesser about commercials.

Deepak Abbot, co-founder of IndiaGold

It is good for the startup ecosystem. It is the ultimate reward. This drives the entrepreneurship culture within an organisation. It is basically signalling to employees that if you work like it's your own company, you could be rewarded with an aspirational title. It is also a signal to the investors that the start-up is not a one man show and there are several other stalwarts who play significant roles.

It is also to de-risk over reliance on one person in case of solo founders. A founder takes a risk, raises initial capital, does 0 to 1 but maybe he is not the right guy to do 1 to 100 and he/she identifies someone who is more capable. Complimenting skills are underrated.

Praharsh Chandra, co-founder & COO of Shadowfax

People do it because the title carries a larger weight and of course there is a larger motivation for roles that are super critical. This way the employee gets to have more skin in the game because then most of his or her incentives get linked to the company performance.

The compensation becomes highly proportional to the company's success rate. Companies do it to for select employees from whom large amounts of work is expected to take the company to a specific direction.