After building four companies with the same cofounder, I began to get requests from fellow entrepreneurs, looking for advice on ways to help make their partnerships stronger. It was then that I realized that my partnership was unique and that many entrepreneurs were quietly suffering in less than satisfactory unions, some of which, were adversely affecting their ability to sustain and grow their businesses. And so, I began to reflect on what it was that made my partnership a success, and then, for additional insights, I interviewed others on what worked or didn’t work for them.
I unearthed a TON of great information, but my first major takeaway was that there are key issues that can be sidestepped if certain conversations are initiated BEFORE the partnership is formed. Conversations that will shed light on mismatched personality types, redundant skill sets, conflicting work ethics, and unrealistic expectations.
My goal is to provide a checklist of some of these important questions and discussions that need to be undertaken BEFORE you shake hands and start your entrepreneurial journey together. These conversations will serve as an “issue detector” in order to help you clarify or solve potentially damaging situations, and ensure that you walk into your partnership with all the facts and a plan for moving forward.
So, let’s begin!
#1: How much money are you willing to invest in this venture? Ah, money. A topic many of us were warned not to discuss with others. However, when it comes to starting a cofounder partnership, it should be the first conversation you have. The “money conversation” will shed light on many things such as a person’s dedication to the business, the level of risk that one is willing/able to take, the size of the financial burden starting the business will be on them personally, and much more. Capital is the leading obstacle to building a business, not just because of the cost to do so but also because as you build it, you still need to eat. If your potential partner cannot put food on the table, you can be sure that their business decisions will be influenced by that. Discussing each other’s financial contributions will quickly trigger any warning signs before you trek too far down the path together.
#2: What time commitment are you willing to offer? “Whatever it takes” is the answer you are looking for. Anything less than total commitment could signal a lack of dedication, even belief, in the business idea. Listen hard to the excuses that your potential partner may give for the inability to commit full-time. They may be legitimate, or they could be a foreshadowing of their work ethic or passion for the cause.
#3 What position/role do you want to have within the company? Ego kills a business faster than anything else, and titles and positions are a great way to gauge if someone’s ego is getting the best of them. The position or role should reflect the person’s skills, temperament, and commitment level. It may make sense that your partner is the CEO, but if it doesn’t, it should give you pause to consider the motivation behind their title suggestion.
#4 What do you see your job description being in your role? What do you see my job description being? Ok, but what are you going to DO? It’s one thing to throw out a title, it’s another to list what you are going to be responsible for. Job descriptions are a type of “plan of attack” and should highlight the cofounders’ strengths and weaknesses. It should be reflective of the job at hand, and clearly outline the tasks that need to be done both now and later. Be sure to read into the list they make. Are they listing the hard things? Do they have a clear understanding of your role within the company? Does the job description demonstrate a clear understanding of the business you are planning to build? This is the time to have difficult conversations should you not see eye to eye.
#5 When do you see us drawing a salary from the business? How much do you think we should draw? This question is another great way to explore a potential partner’s commitment and connection to reality. It can take years for founders to draw a salary, especially a significant one. If your cofounder throws out an unrealistic time frame or number, you may want to reconsider them as a partner. The entrepreneurial journey is difficult and fraught with unknowns. Someone who anticipates getting rich quick is probably not going to be in it for the long and arduous haul.
#6 How long do you want to give the business to become a success? This question enables partners to take all the outside influences ie., money, age, relational obligations, business plan, etc. into account, and come to a decision on what time commitment realistically works for them. No one wants to plan for failure, but having a “timeline to success” allows everyone to commit for a period, wholeheartedly, and let the market and a little of the fates play out as they will.
#7 Are there any Needs you may have that could affect your performance within the company? There may be honest challenges that affect a person’s ability to commit wholeheartedly to building a company, but it doesn’t necessarily mean that they are not fit to do it. Dependent obligations, health challenges, or any other myriad of issues could be a hindrance but if discussed early on, with a plan on how to mitigate the damage, the partnership could continue with only a minor disruption. Again, clear communication, with everything on the table is key so that all involved can make an educated decision about the partnership.
#8 Is your significant other on board? Is your partner’s spouse annoyed that they are leaving that stable job or off on another one of their “wild goose chases”? If so, their influence behind the scenes could easily derail the most valiant efforts at building a successful company. If you haven’t met your potential partner’s significant other, it would be a good idea to do that now. Use the meeting as a way to determine just how ready they are to be towed along for the ride.
#9 What are some of the weaknesses that you bring to the table so that I can help support you? Nobody is perfect; equipped with every skill necessary to build a business. Unfortunately, in the early stages, the founders need to wear every hat possible. By knowing each other’s weaknesses you can find ways to mitigate the damage by designating certain tasks to whoever is strongest even if it doesn’t typically fall under the role that each of you has taken on. It allows you to pay extra attention to areas that could be affected or it could signal that your potential partner may not be fit or ready for the role of cofounder.
#10 How will we handle the logistics if one of us wants to leave the partnership? There are ways to exit a partnership professionally and amicably but unfortunately, they need to be discussed long before they would be executed. Vesting periods, buyouts, first right of refusal, etc are just some of the ways that partners can plan for a fair exit in the future. And just for the record, it isn’t a bad thing to plan for how a partnership will be dissolved. Even if you stay happily in business together for the next 60 years, at some point you will want to retire and reap the benefits of your hard work. Having a general plan for if/when a partner wants to leave is a great way to dig your well before you are thirsty and spark a light at the end of the tunnel.
The cofounder partnership can be one of the greatest assets of your business and one of the most rewarding outcomes of your entrepreneurial journey. Choosing the right partner before you embark, stacks the odds ever in your favour and removes one of the biggest obstacles to long-term success. These ten questions, if asked and the responses pondered, will go a long way in helping you determine if the person before you is the one to assist you in making your dreams a reality. If it turns out they are, GREAT! Two heads are better than one and moving forward together will make the journey just that much more enjoyable and memorable. If it turns out they are not, that’s GREAT, too! You’ve sidestepped a potential landmine and saved yourself significant pain and loss of investment.
So, no matter what way it goes, I hope that this Q&A has been of benefit to you. If you are interested in more ways to build a strong Cofounder partnership, pre-order my new book, The Cofounder’s Handbook, a resource that promises to assist you in building a strong foundation with your business partner.