The right (or wrong) business partner can make (or break) a business
This time of year always brings a lot of talk about dating, relationships, and meeting that special someone. But a relationship with the right business partner can be just as meaningful, if not more so.
If you have a good business idea, you may ask, do you really need a partner in the first place? Just like in dating and life, it all depends on your reasons.
The entrepreneurial path is stressful, expensive, and a little bit lonely. It’s only natural to want to team up with someone so you don’t have to shoulder everything alone. That may seem like a solid enough reason to seek out a co-founder, but is it really worth giving up half your equity and control?
Giving up equity may not seem like a big deal when you are just starting out, but if/when your business succeeds, you’ll discover just how much it really costs. Of course, without the right team and talent, your great idea may never get off the ground in the first place.
My advice is to do some soul-searching and think about why you’re looking for a partner. Is it just because you want someone to talk to every day or is there a true business need?
Complementing your skill set
In most cases, the best reason to bring in a co-founder is to fill some major gaps in your own background and skills. In the tech world, the typical partnership formula is: one builds and one sells.
For example, you might have the idea and business skills to run a company, but no experience in hardware or software. Or, you’ve got deep technical skills but no clue on how to sell a product. In these cases, you’re looking for help either with building and running a business, or building and running the technology.
Beyond experience and skill set, the best partner is going to complement, if not challenge, your personality. If you’re detail oriented and run your life through a series of lists and spreadsheets, you’ll need some help with the big picture and vision.
Where to find Mr. or Ms. Right
Conventional wisdom advises against teaming up with family and friends, since money and control issues can wreak havoc on a relationship and you can end up losing both a business partner and a best friend at once. However, I launched my first business with my boyfriend. Twenty years later, we’re still together in business and marriage, so it can be done.
If you don’t already have a specific person in mind, you’ll need to start the hunt. It’s best to start with your own network: identify your needs and see if anyone comes to mind. If there’s no one in your first degree of connections, chat with a few well-connected friends and colleagues to see if they can make an intro.
To get beyond your current network, attend industry conferences and events to meet your right match. If you’re looking for a developer or engineer, look in a tech-savvy place like hackathons, startup weekends, or startup schools.
There are also plenty of matchmaking services and events specifically designed to bring together startup founders (like CofoundersLab, Startup Weekend, Founder2Be, and FounderDating to name a few).
Don’t get hitched right away
Once you have found the right person, you will want to spend some time getting to know each other before making anything official. While you can never really know someone until you have worked with them for several years, there are certain things you can do to predict the likelihood that you’ll be able to spend time and build a business together.
Startups are stressful, so ideally you’ll want to simulate this climate. For example try out the partnership at a startup weekend where there’s lots of intensity and decision-making. Meet each other’s friends, get together for mega planning sessions, even work on a small project first.
Through it all, don’t let the excitement of starting a business blind you to any red flags. You’ll want to consider how this person works, thinks, resolves conflicts, makes decisions, seeks input, and collaborates as a business partner.
Hash it out up front
Entering into a business partnership should never be taken lightly. Try to have as many “hard conversations” as possible early on. Many startups fail because the co-founders end up having completely divergent life goals and priorities.
For example, discuss when you want to start paying yourselves vs. investing in the company. How many hours should you put in during the average week? What are the specific roles and responsibilities? Is anyone keeping their “day” job and how will that fit into the startup picture? Who will be the public face of the company and take the lead at events? What’s the dream exit? What happens if you get an acquisition offer, but one of you isn’t interested? How will big (and small) decisions get made?
Drawing up a legal document and seeking legal advice is also a great way to force yourself to deal with the sticky matters upfront and potentially avoid major conflicts down the road.
The search for a perfect business partner isn’t easy. But when you are lucky enough to find the right match, the rewards can be great.
Originally posted March 1, 2015 on Mashable.com.
