Amy Pressman used to shop for her family as late as 2 a.m. She did the laundry between 5 a.m. and 8 a.m. Behind the odd hours: her day job running Medallia, the customer experience company she founded in 2001 with her husband Borge Hald.
On Friday, Medallia will make its debut as a public company with an initial public offering that could value the company at $2.2 billion. Shares are estimated to price between $16-$18 each. Hald and Pressman plan to sell 1.2 million shares, reducing their stake to 13%. When Pressman and Hald founded the company, their world looked quite different — just one child (they’ve since raised three) and the company was originally named Berrypick, Inc. Bootstrapping put pressure on the couple for the company to be profitable quickly, which it reached by 2003 before turning to a loss in later years, according to an interview Pressman did with the blog One Million by One Million in 2011.
One insight from the journey? Being married to your cofounder didn’t make much difference.
“My question is, what cofounders aren’t married?” said Pressman, who stepped down from the role of president in 2018, in a Bloomberg TV segment in 2015. Hald, CEO until 2018, also serves as chief strategy officer and executive chairman of the board, where Pressman is a director.
While startup cofounders are often close, plenty of them are also bound together by law. Eventbrite co-founders Kevin and Julia Hartz took their event management platform public in September 2018, raising $230 million. Stewart Butterfield and Caterina Fake, who have since divorced, built photo-sharing site Flickr in 2004 and then sold it to Yahoo for $35 million in 2005 (it’s now owned by SmugMug, run by the father-son duo Chris and Don MacAskill). Roughly 11% of U.S. companies were jointly owned and equally operated by both spouses, according to the U.S. Census Bureau’s 2016 survey of entrepreneurs.
Business-minded couples have the potential to be wildly successful — Forbes listed eight billion-dollar couples in 2014, including Do Won and Jin Sook Chang, cofounders of Forever 21, and Stewart and Lynda Resnick, who own food brands including POM Wonderful, Halos mandarin oranges and Fiji Water. But business failure for romantically-linked couples is also possible, such as Elizabeth Holmes and Sunny Balwani, former CEO and COO of blood analysis firm Theranos, which the Department of Justice charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud. They didn’t tell investors about their relationship.
Finding investment can often be difficult for couples, as many venture capitalists have rules to not invest in any family-owned businesses, such as parents and kids, siblings and couples, said Jeff Clavier, managing partner at Uncork Capital, a seed-stage venture capital firm based in Palo Alto, California. When founders have personal relationships, it often leads to accountability problems. “It’s really hard, because if the CEO doesn’t want to take action, then you have a situation where it’s bad for everyone,” he says. “It’s bad for the CEO’s credibility inside the company.”
Clavier doesn’t have qualms in investing companies with family-tied founders, and estimates Uncork has invested in five to 10 such companies. He’s had successful outcomes with two: Eventbrite and Wildfire Interactive, a social media marketing application that was acquired for $350 million by Google in 2012. He chalks up those wins to the individual smarts of each cofounder, who he said worked together incredibly well.
For two professionals in Silicon Valley — where people often relocate to advance their careers, not necessarily raise a family — it’s “in their DNA” to come to the conclusion to start a business, said Howard Scott Warshaw, a relationship and career therapist based in Silicon Valley. “This is two high-powered, ambitious people who see a helper in the other, someone who can help me with my career,” Warshaw says.
Building a startup is akin to another common collaboration for a couple: raising a child. While both cofounders care deeply about making sure the startup is successful, there can be disagreement and tension in how to reach that success, he says.
That similarity is even more apparent for Deborah and Jake Anderson-Bialis, who built FertilityIQ to help people with fertility options by connecting them to a database of doctors and clinics who they can then review. They started working on the business just 48 hours after their second miscarriage.
Over the last two years, they’ve discovered the drawbacks — and some unexpected advantages to being married to your cofounder. In the startup’s early days, they found that in order to attend a work trip, they needed to leave their three-week old newborn with a babysitter. They had to deal with the financial strain — when both incomes come from the startup, this might mean going without a salary for several years and not having benefits from a steady job, Deborah Anderson-Bialis says.
“I joke with my friends that you know, we’ve been married for eight years but we should be celebrating our 50th anniversary just based on the amount of hours we spend in a day together,” she says.
At the same time, though, having an intimate relationship has its benefits — a lot of the personal issues cofounders may run into have already been tested in the marriage.
Anderson-Bialis says she cherishes the moments of romance in between the business tasks, like having time for a leisurely dinner with her spouse at the end of a conference day.
“To be honest, it’s the most wonderful thing when it works,” Clavier, the investor, said. “And it’s a disaster when it doesn’t.”