A co-founder relationship is like a corporate marriage. It's not exactly "in sickness and health, 'til death do us part," but you might as well treat it that way. As with any marriage, keys to success lie in great, regular communication... and a prenuptial agreement.
OK, you can leave the prenuptial agreement out of your marriage at your own peril, but here are five things to do to survive any business co-founder relationship.
1. Put it in writing
Get everything down on paper. When you're creating your business entity and a business plan, it's a golden opportunity to get down exactly how you're going to operate. Who is going to do what? Is one partner handling sales and another day-to-day operations? Is one partner handling marketing and another the technology buildout? Where is the money going to come from?
Writing it down and documenting it isn't about creating a "gotcha" for co-founders, says business attorney Barry Shreiar. "Writing confirms our memories."
In addition, don't forget to ask yourself how would you separate if you had to. That sounds like a crabby way to start a co-founder relationship, but it's way better to discuss something like that when you're happy and excited vs. ready to flame-throw your way out of the building.
Don't be freaked out by a prenuptial agreement. Getting a separation plan on paper doesn't mean it's going to end badly. You just want to be prepared so that when you're making $100 million and one partner wants to stop working, sail away, and live in Tahiti, you're covered.
2. Set roles, responsibilities, and expectations
How are you going to work together? How will you divide and conquer the empire you are about to build?
Many roles will seem obvious. They may be why you partnered together to begin with. Wozniak and Jobs each had their roles. So do Larry and Sergey. You may know everything there is to know about cutting hair but nothing about growing a business. Bring on a partner and you could be an unstoppable team to grow Joe's Barbershop to 1000 units. A personal example with my first startup Seminar, my co-founder and I were revolutionizing continuing professional education for physicians, with a Netflix type platform. My area of expertise related to architecting the digital content distribution platform and my co-founder was an expert business development in medical association marketplace. He took on the role of hunting to attract those initial relationships and I took on the role of making sure we were able to deliver the committed solution.
If you set roles, responsibilities, and expectations early on, you're setting yourself up for success. No one wants to come into Bonnie's Breads thinking they are primarily working in an advisory role and then learn they're needed at the bakery to turn the ovens on at 4:30 a.m. every morning.
If you're running an ongoing business and decide to partner with someone else to help take it to the next level, you have to go through the same exercise. Are they a financial partner only? Will they be an advisor? Do they have a controlling stake? No matter what their role is, you're writing it down, right? Right?!
Look for Part 2 of this blog with three more tips, which will be published next week.
About the author:
Kim Folsom, Founder of LIFT Development Enterprises, is a not-for-profit, community development organization with a mission to help underserved, underrepresented small-business owners - and Co-Founder and CEO of Founders First Capital Partners, LLC, a small business growth accelerator and revenue based venture fund. Learn more about Kim and her company's mission to help grow and fund underserved and underrepresented 1000 small businesses by 2026 via their Founders Business Growth Bootcamp program, visit www.foundersfirstcapitalpartners.com