If you often hear the terms "founder" and "founding member” chances are you've landed in the startup world. In this realm job titles and their scopes can at times be puzzling. Terms like "co-founder" or "CEO" are no exception. But what exactly do they mean? What is the difference between them?

Below you'll find the answers to these questions and a breakdown of everything you need to know about Founders and related titles to feel like you're keeping up.

Who is a Founder

Founder is a label that is associated with esteem. The term usually connotes creativity and innovation, innate intelligence and daring. For Founders create something out of nothing.

In business, Founders are people who develop a company from scratch – they build something out of nothing and take on the risks and rewards of doing so.

Most companies start with an idea, however it is important to remember that an idea itself is not yet a company. Ideas without implementation are of no value. They need to be embraced and transformed into a new project or startup. If we take Mary Kay as an example, its founder is Mary Kay Ash, and the founder of Amazon is Jeff Bezos.

Who is a Co-founder

Sometimes companies grow from one person's idea and remain that way. More often, though, founders recruit other talent to make their idea a reality.

If a founder sets up a company with another person, they are both a founder and a co-founder. An example of such a project would be Microsoft, with Bill Gates and Paul Allen as co-founders.

A Co-founder serves as a notion granting equal recognition to a number of individuals who set up a business together, typically from the very first step. A Co-founder can be part of a startup from the very beginning, or can be brought in at a very early stage by the original founder. Why? Most often because they can contribute skills or resources that the founder lacks.

As an example, a founder may have technical skills, yet lack operational capabilities. In that case, introducing a Co-founder that has operational skills early in the startup's development process will be a true help and rather an indispensable asset.

A Co-founder can be a highly qualified person who is incorporated into the company's operations once it is already established, or someone who helps run the company and generates ideas for its future.

What is the difference between a CEO and a Founder

Simply put: one is a permanent title, while the other is a job title. "Founder" and "CEO" are two different titles that a person can hold at the same time.

"Founder" describes one' s connection to business history: the one who laid the foundation for the company, who established it. "CEO" refers to a position in the hierarchy of the current organization, and this title can be given to different people regardless of whether they have anything to do with the founding of a particular company.

CEOs frequently are the founders of a company, but it is not a must. Founders might hire a CEO with experience to help them manage the company or lead it in a new direction.

Co-founder as a title on its own speaks little about your competences, instead it just outlines that you played a role in founding the company. Having only a co-founder role may mean that someone has limited responsibilities. A function such as CEO requires particular qualifications, expertise and skills. The majority of executives have an additional title. If you wish to be the CEO of the company, you can use the joint title "Co-Founder and CEO”.

What's the difference between a Co-founder and a founding member

Cofounders and Founders build a company from the very beginning or early stages and "co-create" it. A founding member can often share similar feelings and commitment to a Founder or Co-founder since they arrive at such an early stage of the process.

They often give their all and also take risks, wanting to be a part of something important. They might assist in turning a concept into a promising idea, and then into a perfectly successful business. Nevertheless, a founding team member is actually an early employee, not a Founder.

Who needs a Co-founder

A co-founder can adequately fill skill gaps and provide crucial support in the early stages of development. It is important to ask oneself right from the start: do we already have in place everything necessary to launch this company? What strengths and weaknesses do we have?

Once you've answered these questions, and know the strengths and shortcomings you need to fill, you can begin to compose your team with the qualifications that should be included.

What do you know about operations? Do you know how to deal with investors or do you have sufficient knowledge of finance? Do you have the sufficient level of technical expertise?

Not having any of the above can turn out to be pricey. Learning might be costly – everything we don't know and need to master is an expense for our business, including the price of the mistakes we make. Errors can also come at high cost, and it is guaranteed that they will happen, but the fewer the better. In a new business, when you have to do many things simultaneously, learning it all is difficult and time-consuming. Hiring a co-founder means supplementing your own strengths and helping you get off the ground.

How to determine the titles

If you are wondering what to call the members (Who is the CEO? Who is the head of sales? Who is the CFO?), focus on what each person brings to the company. As long as you have done quality work in searching for co-founders, it's already reasonably clear what each person's competencies are. The tech guy is the CTO. The money guy is the CFO. The client's guy is the Head of Sales.

It is not the title that really counts

In the business world, job names can be challenging, not only in terms of their proper selection, but also in terms of comprehending the meaning behind each of them. It is worth it to distinguish the difference between the complex notions they stand for and to know exactly who the company needs.

The crucial thing is of course not to get too caught up in the titles per se, but focus on the role and responsibilities one has in the company. This should help to find a person and role that will adequately fill the skills gaps and assist the team in the early stages of development.