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Business relationships can end in divorce too.

Throughout the resources available to entrepreneurs, there is an underlying belief. Starting a business with co-founders improves your chances of success. This claim is almost invariably backed up by a statistic around the large percentage of fortune 100 companies being started by 4 or more persons. I’m not here to debate whether starting a business…

Throughout the resources available to entrepreneurs, there is an underlying belief. Starting a business with co-founders improves your chances of success. This claim is almost invariably backed up by a statistic around the large percentage of fortune 100 companies being started by 4 or more persons.

I’m not here to debate whether starting a business with a co-founder is a good idea.

Personally, I think it depends on your working style. If having a business partner is likely to drive the growth of your business and motivate you and lead to a synergistic relationship, it’s probably a wise choice. However, if you work well alone and a good at bringing in the key skill sets to drive your business’ growth at the appropriate time, you may be better off alone.

What I’m here to say is that you should be VERY careful who you choose as your co-founders.

At the point of founding a company, the path for the life of the business is almost entirely decided. At this point, your share can be diluted more than at any other investment point.

As such you needs to choose very wisely the entrepreneur or entrepreneurial manager you bring on as a co-founder.

Think about these key areas:

  • How much time do they have?
  • How much experience do they have?
  • How well do you work together?
  • How much of an overlap in expertise is there?
  • How much value do they bring to the table (objectively speaking)?
  • Are they as passionate as you?
  • Are your personalities complimentary?
  • Are they in this for the long haul?

When it comes to founding the company, ensure you do it properly. Be sure to include ‘divorce clauses’ so that you have the right (and so do they) to regain equity if certain things happen.

These clauses prevent people from putting in little to no work and reaping an unfair reward. All within the bounds of the law.

Remember, choose your partners carefully!

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