How to Find the Right Co-Founder for Your Startup
You’re thinking of starting your own business. Do you go it alone or do you need a partner?
How many people do you know that want to start a business with their best friend? Probably at least a few. Now, how many partnerships do you know that have blown up? Also, probably at least a few. Why do you think that is?
The biggest reason partnerships fail is that most entrepreneurs don’t know how to find the right partner. They just pick someone they know. They assume that because they like to hang out together, or have a beer together or went to school or even grew up together, it means that they will also partner well together. Sorry to say, but that is just not the case.
Unfortunately, going into business with a friend is more likely to wreck the friendship than help your business. While there are definitely exceptions to the rule, your best advice is to keep your friends as your friends and instead, choose a partner that has the specific qualities you need to augment and offset yours. The best way to say it is that partners need to hire each other.
You could go it alone rather than get into the complications that come with having a partner, but the fact is, having the right partner is awesome. It is great to have someone to share the passion, share the work, bounce ideas around, bring skills you don’t have, contacts and networks and even money. The right partner will cheerlead when you are getting frustrated, celebrate your successes, and balance you out in a whole bunch of ways. Honestly, a great partner is like a great marriage, and sometimes you need to date a lot before you find the right match to build a successful business with.
How do you do that?
The first thing is that you really need to decide what your partner needs to bring to the table. Where are your strengths and what are your weaknesses? There is no point in both of you being excellent in operations and horrible in sales. Figure out what skill set and experience would best complement yours.
Then get out there and date.
- Talk to professors at entrepreneurial programs – some of them hold events that put their students with people who have businesses that need partners. Some bring in entrepreneurs to present to their students.
- Join networks in your local area – many also have good events where you can meet people. Talk to people in the industry you want to target – there are many who have great inside knowledge of the industry because they’ve seen what is currently working and what isn’t. They may know a good fit for you … or they may want to move to something entrepreneurial.
- Think of people you’ve worked with over the years. Does anyone strike you as having the skillset you’d need to be a good partner?
- Investigate the many online “find-a-co-founder” sites. Some examples to get you started include StartHawk and CoFoundersLab. There are many others.
My husband is in the private equity business and regularly buys businesses in which he partners with current owners/operators so in effect, he is always doing due diligence on potential partners. We have a family policy that we have dinner with the potential partner and that person’s spouse/partner (if there is one).
One of the things you learn outside of the traditional interview process is how the person treats others. You’d be surprised how much you can learn by seeing how s/he interacts with waiters, and parking lot staff members and other people in a subordinate role. It is also important to see how that person interacts with you in social setting and also how s/he talks with their partner and with your spouse/partner. This person and you are going to be spending a LOT of time together, and likely your families are going to get to know each other pretty well. If you can’t mesh in a social situation, that is probably going to be a red flag. Not that you’re going to be hanging out together, although you might, but you are going to have a lot of late nights and weekends and you’re going to want to be with someone who you like.
Ok, now you have dated a lot and are thinking about getting engaged. What’s next? People often miss talking about a few key things:
- Where do you see the business going? Who is the target customer? Make sure you are aligned.
- What are your expectations regarding hours and commitments? If you’re going to be burning the candle at both ends and the partner sees this as a side hustle, get back on Bumble.
- What do you see as your main areas of responsibility and what does your partner see as theirs? Is there too much overlap or is there good division?
- Are you equal partners or do you have more equity or voting shares? Some businesses give extra shares to the person who came up with the idea – and that person either gets more money or gets the tie-breaking vote in case of disagreement.
- Along those same lines, do you agree on policies regarding situations where one wants to do something and the other doesn’t. In my business, one partner could try to persuade the other but if either had a hard NO on the idea, it was a no.
There are lots more suggestions but this will get you going. The final thing is that partnership agreements aren’t mandatory, but like a marriage contract, they are there to protect you if things go sideways. The hope is that you’ll never need one, but it sure is good to have one if there is trouble. It is also useful to have if you are talking about building to an exit – it should be very clear if there is a big win how the spoils get divided.
I was lucky – I had an amazing partner that wasn’t a friend when we started but is one of my nearest and dearest now, and I attribute it to the fact that we say we hired each other. We complemented each other from a business perspective and were totally aligned from a personal one. We made it through one exit and then went right back in for round 2 and exited that one too. Follow some of the above rules for finding a great partner to end up with someone who is going to be with you to the end.