5 tough things to talk about with your future co-founder
Like choosing the person you marry or have babies with, choosing a business partner is not a decision to be taken lightly. The romance of any honeymoon period wears off, but none so quickly as the business partnership honeymoon. If you’re a fast moving entrepreneur, then you’ll know that seizing opportunities and getting some skin in the game fast is extremely important. This means that your relationship with your co-founder/s will need to evolve quickly. Moving out of the fun ideation phase of a business into difficult startup territory puts massive pressure on people who are in business together. The foundations of your partnership will become really important and it helps to have at least spoken about some of the following things:
one
Roles & responsibilities
In an ideal world, you will partner with someone who will bring a set of different yet complimentary skills to the table. Before you put so much as a cent into your business, talk about who will be doing what. Even if you aren’t entirely sure and even if the answers change over the course of your partnership. Nothing is harder than knowing you’re a 50% partner doing 95% of the work. Or visa versa. If the scales are going to be unequally balanced for some or all of your partnership, it’s better to know that before you dive in.
The easiest way to figure this out is with a long checklist that itemises the main tasks in your business. Really drill down into it. Who will deal with product development? Logistics? Key partnerships? Marketing? Business administration? Growth strategy?
Look at who has the most proverbial ticks next to their name and figure out whether the balance of responsibilities is sustainable.
TWO
Money
There is no business on the planet where money and remuneration is not part of the equation. Not even in a non-profit enterprise. Have difficult money conversations early on and make sure that you and your co-founder get onto the same page.
Here are some questions to ask your partner:
What are your expectations about pulling a salary versus building up business capital?
Are you doing other work on the side or does this business need to support you early on?
Do we have similar risk starting this business? Do we both have the same amount to loose?
Can we start making money quickly and how will it be used?
How will we decide who draws what amount of money when the business can afford to pay us?
How much capital can you put into the venture?
Who of us will be managing business administration like accounting?
Do we need to raise capital or take a loan?
three
Strengths & weaknesses
Knowing what your strengths and weaknesses are and how they might work with and against your co-founder’s is invaluable. In business, this applies to both your hard skills and to your personal attributes. Have this conversation early on and do a deep dive. At very least, your eyes will be opened to the challenges you’ll be up against further down the line… before you commit to the partnership. At best, these insights will equip you and your co-founder with a better understanding of one another that’ll help you navigate your business relationship.
four
Vision & mission
It’s important to be on the same page about what your business is aiming to do and how you’ll do it. Your vision will guide even tiny business decisions - it’s one area you can’t afford divergence on. From an interpersonal point of view, conflicting visions can cause incredible tension and conflict. And that’s never fun to deal with. From a business resource point of view, startup territory means that there’s no time and money to waste. Every cent and minute must be spent building toward one clear and focused goal.
five
Worst case scenarios
It’s never nice to plan for things to go wrong. But, just like with marriage, you should aim for the best and prepare for the worst. A terrifying amount of startups fail - something like 90%. Although it’s tempting to go into a business partnership with rose-tinted glasses, believing that you’ll be part of the 10%, don’t. It’s important to have a clean, neat exist clause written down somewhere and agreed upon before it’s needed. Depending on what breaks up your partnership, there might be some big emotions involved. Having an exist strategy nutted out beforehand helps keep things fair and equitable during the dissolution… even if things get hot and heated.