Discover The Differences Between Co-founder And CEO

Both co-founder and CEO play crucial executive roles in every organization. Learning the key differences between the two can help the executive team decide on the proper titles for different employees.

Generally, to be considered a co-founder, you must have played a notable role in the establishment of that company at a particular point in time, while the CEO is just the company’s highest-ranking executive.

They are both vital members of the leadership team to help firms reach their goals and expand business operations. However, they serve different roles.

In this article, I will explain what a co-founder and a CEO are and highlight the significant differences between the two roles.

Read on to learn more.

Who is a Co-founder?

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A co-founder is an executive team member who collaborated with stakeholders and contributes to building and launching a firm.

They generally share specific responsibilities. However, in cases where there is only one founder and co-founder, the executive team determines who gets the titles of founder and co-founder.

A co-founder is often talented and actively participates in the company’s affairs after its birth to lead the company and provide future ideas.

Who is a CEO?

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A CEO (chief executive officer) is the leader of a company who engages in active leadership through communication with different teams and negotiating with other firms while leading the company toward its objectives.

Often, CEOs are the founders of the company, however, they do not have to be. The founders of the company can employ an experienced CEO to help them manage the company or guide it in a new direction.

SEE: All You Need To Know About Executive Functioning Skills

Co-founder and CEO: Differences

In general, if a CEO is not the same as the co-founder, their functions within the organization are significantly different.

Even though a co-founder may have limited responsibilities, being a CEO requires certain skills, training, and experience.

The following are the notable differences between a co-founder and a CEO based on their respective roles:

CEO

Generally, the CEO is more involved in a company’s leadership and helps to manage the firm. They perform the following roles:

  • Interacting with different shareholders or organizations: The CEO is the company’s public face, hence, they communicate with stakeholders or investors, the government, and other organizations on behalf of the company’s interests.
  • Designing and sustaining the company’s goals and visions: CEO also designs the company’s general vision and specific goals and ensures that they are met.
  • Evaluating the activities of other leaders in the company and determining hiring decisions: They collaborate with the executive team to ensure that everyone works to achieve the company’s goal.
  • Identifying and solving potential business risks: The CEO collaborates with other executives to evaluate the company’s overall risk and help solve it through training, education, and other measures.
  • In charge of the company’s short and long-term strategies: They work with other corporate leaders to maintain the organization’s short and long-term goals and objectives.

SEE: Tips To Ask If A Company Is Hiring

Co-founder

Often, most co-founders are involved in the leadership of the company and have different roles and responsibilities depending on the company.

While some do not actively participate in day-to-day business choices, some do and take on additional roles such as CFO or COO. The following are some common co-founder roles and responsibilities:

1. Helping to raise funds

One of the main responsibilities of a co-founder is fundraising. Most times, not every co-founder invests in the business they co-founded, however, they can help in the company’s fund-raising efforts.

Co-founders who are enthusiastic, and persuasive, have good communication skills, and have a thorough understanding of the company’s product or service can make compelling pitches to potential investors.

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2. Creating team leads

Another key responsibility of a co-founder is to identify and build leadership teams in the company.

As a result, a co-founder’s responsibility lies in identifying employees who share the company’s goals and objectives and will devote themselves to achieving them.

3. Developing the company

Generally, every organization is happy to welcome ideas to ensure the success of their products or services.

Therefore, the right co-founder will help build strategic partnerships that will help the company grow, and to focus on its long-term goal of the company.

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4. Budgeting and planning

One of the main reasons new businesses fail is because of poor financial planning. As a result, most co-founders actively engage with the founder or other co-founders to keep tabs on finances and spend judiciously until there is a constant flow of revenue.

5. Boosting morale

Businesses sometimes encounter marketing challenges or popularity, which may affect the general motivation of the company.

So, a co-founder can help boost the morale of the company by giving a team talk and solving internal problems.

SEE: How to Get Your Team Engaged

Can you serve in both capacities?

Yes, it is possible to serve in both capacities as a CEO and Co-founder where you can adopt a dual or single title based on your role in the organization.

If you started the company with a group of founders, you can accept the title of co-founder so as not to single out as the sole creator of the business.

As a title, co-founder says little about your skills, and simply implies that you had a hand in establishing the company.

However, as a co-founder, if you also wish to be the CEO of the company, you can use the titles “Co-Founder and CEO” or “Co-Founder and CFO” to indicate that you are not only playing a leadership role but were also part of its establishment.

SEE: What Are Management Skills?

Skills needed to be a CEO and Co-founder

CEO

Co-founder

  • Drive, ambition, and tenacity
  • Leadership skills
  • Entrepreneurial skills
  • Long-term vision
  • Delegation skills
  • Consistency
  • Ability to experiment and take risks

FAQs

How much do CEOs earn?

The average salary for CEOs is $124,803 per annum. However, salaries are dependent on experience, education, geography, and the company.

Can a CEO sack a co-founder?

Yes, if the co-founder is not a board member of the company, a CEO can terminate his/her employment.

However, if the co-founder is a board member, firing them can be difficult. The board members must decide on the termination.

How many co-founders do most companies have?

Typically, most businesses have two to three co-founders.

How much does a co-founder earn?

Often, co-founders do not take any salary during the early stages of the company because the company might be trying to save money.

However, they may take a little salary depending on the cash flow, the state of the company, and the equity stake.

Conclusion

Starting and operating a company all by yourself can be very attractive and captivating. However, it can be difficult and time-consuming and requires consistent and calculated efforts.

Thus, having a co-founder or a CEO can help to lessen or alleviate stress and give you the appropriate technical know-how to develop the company.

As a result, you should look into the circle of friends, family, or colleagues to become a co-founder or CEO to help with problem-solving and help the company achieve its goals and objectives.

I hope you found this article interesting. You can also read to know about organizational skills and how you can put them to good use.

Thanks for reading.