Two heads are generally better than one. And three heads seems like an even better idea. Not to mention 4 or 5. When it comes to startups, partnering with another business/technology enthusiast such as yourself might seem like a must-do. However, a wrong decision in this department could cost you your start-up.
If we look on the bright side, business partnerships mean burden sharing, mutual support, companionship and problem sharing. It is something like a mix between a shoulder to cry on when things go wrong and someone to hug when things go right. On the dark side, it also means less autonomy, not being able to do what you want all the time, slower decision making and often fights about everything.
1. Know yourself first
I am starting with a cliche. A very useful one. The “nosce te ipsum” latin aphorism is the first step in starting business partnerships. In order to choose your co-founders well, you first need to know what your skills are, what your weak and strong points are and, most importantly, who you can work with.
2. To partner or not to partner?
The next thing you should be thinking about is why you need a partner in the first place. If the answer is “so I can have someone to delegate to” then you should check whether hiring someone is not a better idea. If you think your idea can grow bigger with a little bit of help from another partner – help can mean money, expertise or other resources – then you should probably start looking for a partner. However, it all depends on your resources. If you have money then hiring contractors instead of giving up equity can be a great idea. But keep in mind that no one will act as if the business is their own unless they really own it. Your choice!
3. A partnership is like marriage… in so many ways
When you choose your partner you should definitely keep in mind that “opposites attract and so they should“. Don’t just look in the mirror. You need a partner that complements you, not a person with the same strengths and weaknessesu. However you still need to share the same basic values and be on the same wavelength. And you need to make sure you have the same objectives for the business in hand or that you can agree upon them. On the other hand, the chances that you and your partner share the exact same vision are very low. Partnerships work best when one of the partners is the visionary and the other one is in charge with making things happen. And another thing: make sure your partner-to-be doesn’t need managing.
4. Don’t mix business and… personal life
Don’t go into business with friends. Or family. And this is not just an old saying. Mixing business with loved ones and friends might trick you into being influenced by your personal relationships when making decisions. And it will also make your personal life living hell as you won’t be able to disconnect from your daily work.
5. Love is blind and that’s why we sign prenuptial founders agreements
Business partnerships are like marriage. They all start in an optimistic tone but it’s better to have a prenuptial agreement. Kidding. Nevertheless, even if you trust your partner completely, you should sign a founders agreement prior to anything else. Trust me, it’s not a useless piece of paper. Creating and signing a partnership agreement will be a good opportunity for you to think about each partner’s roles and contributions as well as their exit routes.
6. Set your goals and the rest will follow
As I was pointing out above, one of the major frustrations you will hear in a business partnership sounds something like “I’m the one doing all the work“. Familiar, huh? Whether you are the one doing all the work or the one having a lot of fun doing business, you should always keep in mind that a prerequisite for starting is agreeing upon who does what and how much of it. This will help you a lot when you’ll have issues like different work styles (one gets up early, one stays up late) or simply different rhythms.
7. Communication is key
This is already a cliche. But it is nevertheless neglected several times. I know meetings are boring and email is a total waste of time and a productivity threat. However you should be connected all the time and communicate about the smallest changes in business development, about the good and bad news and about any feedback you may find useful.
8. Decisions are made jointly… or are they?
It sounds picture perfect. We both argue until we agree upon a decision. And an even better one: each one of us makes his decisions in his expertise area. Yeah, it could happen. In fairytales. However, in real business life, someone needs to have the final say. And you should agree upon this from the very beginning.
9. In the end… it’s al(l)so about the money!
In the end each partner receives a share of the return of the business depending on how much they invested. It is very important to agree upon this from the very beginning. And it is also very important to calculate sweat equity’s value as well as risk value correctly. Think win-win and make sure the reward matches the effort for every partner. Check our articles about the value of sweat equity for a more in-depth analysis.
10. Have some fun for a change!
Even though in the end it’s about money, starting up a business is about being your own boss, having your own rules and having some fun while making things happen. And very often founders tend to forget about that.
Do you have other tips for choosing and living with co-founders that you would like to share? Any good or bad experiences you learnt from?