Becoming a co-founder is a lot like a marriage: if you find the right fit it can be total bliss but a bad match can result in a lot of heartache.
Five years ago I got the startup itch and left my cushy job working at a Fortune 500 company for the entrepreneurial world. Since then, I have worked at three startups, with the current being This Dog's Life, where I am the co-founder.
At This Dog's Life, I was not the original founder but came on board after the business was started. Having seen co-founder relationships both work and fail, I didn't just jump at the opportunity. It was a serious commitment and took a lot of thought before I joined.
Before you begin a co-founder discussion with your college roommate, someone from a founder match site, like founder2be, or through a mutual acquaintance, here are five guiding principles that helped me make the decision to join the team.
1. Ensure chemistry
A startup is grueling work and permeates into every aspect of your life. Many entrepreneurs work way beyond the typical 40-hour workweek, with many stating they work 18-hour days. That said, 23 percent of startups fail due to "not the right team" and 13 percent don't make it because of "disharmony on team" according to CB Insights.
There are a few things you can do to decrease the probability this will happen. First, try the airport test. Could you imagine yourself spending three hours with this person in an airport - one of the worst places possible? If the answer is no, you may want to rethink things.
Another idea is go into the partnership slowly. Try working on a project together for the startup. See how each other thinks, communicates and works. This can help to see if you two could work well as a team.
2. Look for complementary skill sets
Similar to a life partner, your co-founder should bring complementary skills and attributes to the table. It is not effective to work with your clone, so find the "ying to your yang."
A recent Harvard Business School study found that organizations with diverse leadership are "45 percent likelier to report a growth in market share over the previous year and 70 percent likelier to report that firm captured a new market."
One thing you can do is start thinking who your perfect co-founder would be. Similar to a job post, write down what you are looking for, what the person should possess and what responsibilities the person would have. Many of the attributes you desire should be your own weaknesses.
3. Discuss vision
I am surprised how often this one gets overlooked. Entrepreneurs get so excited about executing their ideas that they skip an essential framework to any successful business: a clear and concise business plan.
At the end of the day, your vision is the fabric and foundation of your company. You and your co-founder must agree on the central vision and mission of the business you are creating. To take this further, there must be a deep understanding, not just a peripheral goal. Your vision should make you and your team feel motivated and inspired as well as guide future business decisions. If you cannot agree on the essence of the startup, it is best that you not move forward.
When I joined This Dog's Life, we looked at a co-founder expectation alignment form to ensure we both wanted the same thing.
4. Agree on exit strategy
If the stars align, the exit strategy is the payday after all of your time and hard work. The worst thing that could happen is if you and your co-founder don't agree on the exit and it passes by. To ensure this doesn't happen, the exit strategy should be decided at the beginning of the startup. It is part of the framework of your business and will impact your goals and growth for the company.
Sit down and determine if you goal is an IPO, acquisition or you want to run the business forever. If your exit strategy is an acquisition, you should talk about the circumstances in which you would sell the company and the price, along with other considerations.
5. Think about culture
As co-founders, you will set the tone of the startup from day one, whether you are there at inception or come down the road. It is critical that you and your co-founder think critically on how to build and maintain an environment that will attract and retain talent.
If your co-founder or someone in a leadership position is negatively impacting your culture it will create a toxic chain reaction. Human capital is critical to a startup and the loss of important employees can doom an early-stage company. Make sure you build and maintain an inspiring mission and atmosphere where your team gives there all for everyone.
One tip I recommend for creating the culture you desire from the get-go is writing down the values that are important to the company and hiring with those pillars in mind.