A startup can take many forms. Some entrepreneurs hit the ground running with their business school classmates, while others may go solo. The majority of companies, however, aren’t very successful without at least a co-founder or a small team. Even Apple started with two Steves behind the wheel (Jobs and Wozniak, that is).
The process of picking a business partner can be akin to choosing a future spouse. Here are some tips for measuring that chemistry:
1. Know What You’re Looking For
First of all, do you even need a partner yet? Are you doing just fine freelancing, or running things on your own? A key part of business is only exhausting money or effort when it’s necessary. You might need to first raise some more money or, if the company is doing well, wait until you’re overflowing with clients before getting some help.
Once you get to this point, it’s wise to assess your needs, not what you’d like to have on staff. Do you need a know-it-all who can probably take over the company when you aren’t looking? How about a heckuva nice guy who always buys you a drink at happy hour, but doesn’t know his revenue from his expenses? Truth be told, you likely want to get the best of both worlds. If the skills and personality traits you each possess are depicted as a venn diagram, you definitely want a lot of overlap, but you also don’t want two giant circles right on top of each other.
Some of the best businesses consist of partners who are exact opposites. One may be the brains behind the operation, while the other is better at socializing with clients. Products or services that demand multiple skill sets could require co-founders from different academic backgrounds. For example, creating a piece of music software minimally requires one person with programming skills, and another with music or audio engineering experience.
2. Be a Secret Agent
Some of the most promising candidates might have some secrets hiding behind the curtain (besides, you know what they always say about the quiet ones). It’s important not to let your trusting nature get the best of you when it comes to this big part of your professional (and financial) career. Be sure to conduct background checks, credit checks, and any other research that can ensure a sound hire. If a resumé or interview claims that your potential partner increased sales at their last company by 50%, make sure the company actually exists, and that someone can vouch for those numbers. A good indicator of trouble is finding out about leftover loans, or other money still owed. While a bit of know-how can allow you to search for this information on your own, many turn to third-party agencies to do it instead.
3. Have a Shared Passion
As with any job or project, no one is going to work with you if they don’t feel excited about it. The best-case scenario is finding a partner with not only an affinity for your product, but even some possible ideas for expansion. When you ask for the candidate’s motivations for joining your team, the response should go beyond a listing of skills and experience. A worthy partner will have a desire in their eyes to work with you, or to execute an idea that they feel should have been tried long ago. The events in this person’s life should also allow for them to follow through on their promise. There should be no prior commitments, or a significant amount of days off, to take away from their time at the office. Of course, this list of demands will sometimes require the founder of a company to “fly someone in” from a different city, state or country. At the very least, in cases where most people haven’t even heard of your idea, you may want to offer generous benefits, such as equity in the company. This is already standard practice for most co-founders, anyway.
4. Have it All On Paper
Even when all is said and done, you still need a legal cushion. Some people don’t get a prenuptial agreement, but this is no love affair. It’s important to have every team member sign a contract, a non-disclosure agreement, or any other document that could help you when things go sour. In fact, if your buddy starts to get manipulative at this point and asks if you even like him anymore, it’s probably best to say “Um, I guess not,” and look for someone else. Better to hurt someone’s feelings than your own bank account. And besides, not having those signatures could come back to bite you in the long run.
5. If You Love Something, Let it Go
Over half of marriages in the U.S. will end in divorce, and your business relationships could go the same route. This is not to say, however, that you have to be a jerk about it. It’s okay to trim the fat and hold employees accountable for their performance. It’s not okay to completely alienate someone who could be a future connection, or to scare the bejesus out of the onlookers. This past August, AOL CEO Tim Armstrong fired a staff member, Abel Lenz, in front of the entire crew. On video, no less. Armstrong did later apologize for the public firing, and had a legitimate reason for letting Lenz go, but he also created some unneeded tension in the room. Not to mention, some bad press in the process as well. Especially for a partner, who may have some privileged, unleaked information about the company, it’s best to end the relationship with the least amount of collateral damage possible.
written by Jeremy Rappaport of Fueled.
