No man is an island. No company can operate without outside partners. As cliché as it sounds, this is particularly true when starting a business. For example, when founding a startup, one of the crucial steps that a founder must do is looking for a business partner. History is dotted with business partnerships that are as legendary, if not more legendary, than the business itself. One of the most crucial business partnerships is that of founder/co-founder. Examples of famous founder/co-founder business partners include Microsoft’s Bill Gates and Paul Allen, Apple’s Steve Jobs and Steve Wozniak, P&G’s William Procter & James Gamble and HP’s Bill Hewlett & Dave Packard.
The business partner or co-founder often assumes one of the many critical executive functions like a chief operating officer (COO), chief executive officer (COO), chief technology officer (CTO) or chief marketing officer (CMO). The composition of the core team (often the first two or three founders) is vital in the success of startups. Wrong team composition is often cited as among the top five reasons why startups fail. Businesses, big and small, young and established, also need outside partners to be successful. Suppliers, service providers, recruiters, to name a few, are essential partners for businesses to thrive and succeed.
Why is looking for a business partner such an important step in starting a business? How to find the business partner that is the right fit for you and your business?
The Importance Of A Business Partner
Finding the right partner from the get-go is crucial for the success of a business. Here’s why it is important:
Complementary Skills: Addressing The Skills Gap
However clever you are, you will not have all the necessary skills in running a business. If you are decisive and mission-driven but lacking in technical skills, you might be a good fit as CEO, but you might need a CTO to take the lead on the technical aspects of building your product or service. If you are a multi-talented and multi-tasker (and can maybe cover everything), should you not concentrate on one aspect of the business you can do best? Having a clear delineation of tasks and skillsets is especially important in the early stages of the company, where product and market developments are most intense and require specific skill sets.
The Journey Can Be Lonely
There is nothing like having someone, daily, battling it out in the trenches with you! Advisors, mentors, friends, and family are great, but nothing compares to having someone to talk to about the many challenges and frustrations of starting a business. It is vital that you find a partner that complements or adjusts to your personality and quirks. In the same way that you should be open to adapting to your business partner’s personality and quirks!
They Can Cover For You
Having a business partner in the form of a Co-Founder or CXO is also a way of having another person to cover for you. You, as the founder, should still be able to take a leave from the business when needed. The business partner can be co-signatory for checks, contracts, proposals etc. He can take your place, represent, or take your stead when you cannot or unavailable to attend meetings, events, or social gatherings.
They Can Give Honest Opinions And Feedback
Nobody is free of biases and blind spots, especially someone closely involved in starting a business. Having business partners give you a peer that can point out these blind spots so you can improve. From personnel issues to how to launch a product, a partner will open your eyes to things you might not see. This is true during the early stages of the business but even as the business grows and scales. A partner can act as the devil’s advocate and truth sayer – someone who is never afraid to give his honest opinion and feedback and figure out different business scenarios with you.
Before You Settle
Do these steps before finding yothe right partner:
- Define your business idea – it is important that you have solidified your business idea before finding a business partner. If you are still working on the details, it is essential to mention this upfront when considering potential partners.
- Update your online presence – before going on a hunt for a business partner, make sure you beef up your online presence. Once you start putting out feelers for a business partner, the first thing a candidate does is check who you are, and they do this by searching you online. Make sure you project a credible image so that a candidate will be keen to talk to you.
- Define what you’re looking for in a business partner – look for complementary skills to yours. That is why defining your business idea is a prerequisite because it will give you a clear understanding of what skills you need from a business partner.
- Define your exit strategy – an exit strategy is a plan for partners to settle on to cash out the business. The three options are to sell the business to a third party (e.g., Amazon purchases Zappos), take the company public (e.g., Facebook), or pass ownership to family members in exchange for a significant buyout. When considering partners, make sure the person understands your exit strategy and agrees to it. No exceptions.
- Do your due diligence – due diligence is the process of evaluating a partnership candidate based on independent resources. Ask for their resume. Request for character references and make sure you call them. Search for them online. Review their previous work. This is perhaps one of the most important things that you need to verify. After all, you are looking for a business partner to help you accomplish the many and often skill-specific challenges of starting a business. Check if the candidate has a history of owning a business. Does he have any criminal or litigious history? What about his reputation? Did he hop from one job to another, which could mean commitment issues? What about the history of bankruptcy and financial matters? Incorporate an interview into the process of finding a business partner. While interviewing potential candidates, be sure to market yourself and your business idea. It is a recruitment process both ways. The candidate must also be able to judge you and your business idea accurately.
How To Find A Business Partner
Whether they are co-founders, collaborators, investors, advisors, or third-party providers; there are several ways for looking for a partner:
Online
The great thing about the internet is that you can find anything you want, including business partners. There are now many platforms and founder matchmaking sites where you can advertise to find a business partner.
Former Co-Workers Or Colleagues
Many of the founder/co-founder relationships you find in successful startups stemmed from a former co-worker/colleagues/classmate relationship. You already know their work firsthand, so there’s less risk of the partnership not succeeding. You already have an idea of their personality and habits so that you will avoid problems.
Mentally separate past co-workers whom you know to have experience, skill, and drive from those who were inexperienced or demonstrated shoddy work or personal ethics in the past. Then, choose an individual who is compatible with you personality-wise and approach her to see if she is interested in leaving traditional employment for a career in entrepreneurship and has a similar business vision.
Former Clients
Former clients can also be an essential resource for potential business partners. You already have a business relationship with you, and they already know you. The most important consideration is to ensure that they were not working formerly for a business that competes with the company you are about to start. They have signed a non-compete clause barring them from joining a competing business.
Your Professional Network
Another important resource is your professional network. Chances are, in your line of work, you come across potential business partners with skill sets and personalities that complement yours. You can also ask for referrals from the people in your network.
Incubators And Accelerators
Incubators and accelerators receive participants to their programs regularly. They also have an extensive network of mentors, advisors, and investors. All of these are a potential resource for business partners. The people on the radar of incubators and accelerators are also likely to be like-minded people interested in co-founding a business.
Business Brokers And Consultants
You can also seek help from business brokers and consultants. They have a vast network and are often in touch with entrepreneurs looking for their next challenge or business partners. Although there is a cost involved, retaining the services of a business broker or consultant could pay off their expertise in negotiating business deals.
Startup Events And Conferences
There are many of these events where you can meet potential business partners. Hackathon-like events like Startup Weekend allows you to pair up with potential partners to define a business idea in 48 hours. You can also attend startups events or conferences that are dedicated to your target business vertical or sector. There will potential business partners there that are interested in your target business vertical or sector.
Family And Friends
People will tell you to avoid founding a business with family members and friends as conflicts in the company could spill over into your personal life. But if your work style and skills are a match, this should not stop you from seeking a partner among your family and friends. Just ensure that you establish clear expectations about the role each of you will play in the business from day one. In any case, put in place an exit plan to not jeopardize the personal relationship if the business partnership does not work out.
Where To Advertise
- CoFoundersLab – With CoFoundersLab’s extensive network, you will be able to find the partner you are looking for. The company also holds in-person matchmaking events.
- techVenture’s Cofounder Network – for serious entrepreneurs looking for partners, techVenture’s network is not open to everyone. You need to apply to get in.
- Techcofounder – for a technical co-founder, Techcofounder is a great resource. You can post an ad for your startup to recruit the best.
- Cofoundme – you can register your profile and get matched with potential partners. You also can publish business ideas, browse startups, and create job postings.
- FoundersNation – like a classic dating site, FoundersNation allows you to create a free profile and browse co-founders in your area with specific skills. This will let you o find the right partner for your business.
- StartHawk – With StartHawk, you can use various filters to narrow your co-founder search and use their internal messaging system to communicate with potential candidates.
- IdeasVoice – IdeasVoice is a global collaboration site that allows aspiring entrepreneurs to share and workshop business ideas, discuss projects, and even find business partners. You have an option to sign up for a free account or go for IdeasVoice premium services for advanced search and profile promotion.
- AngelList – you may know AngelList as a job search site; many entrepreneurs also use this platform to post positions for co-founders and business partners—especially in the tech industry.
- Reddit – many small business owners have found success using subreddits dedicated to finding business partners or co-founders, such as the /r/entrepreneur subreddit or the /r/cofounder subreddit.
- LinkedIn – designed for business networking—and although it might take some more time and effort— LinkedIn is a worthwhile resource to use when searching for a business partner online.
- Meetup – it may be a less direct way of finding a business partner online; it can certainly be helpful when you’re just starting your search. Meetup also has groups and topics devoted to business partnerships and networking.
Once You Have Found The Right Partner
The bottom line is that looking for a business partner requires some trial and error. It is vital to approach it with an open mind yet putting precautions to lessen the risks. As much as possible, conduct a trial of the partnership. A trial period can be informative for both you and your potential partner. It can help both of you determine if the partnership is a good fit before taking on the risks of starting a business together. For example, you can start by hiring a potential partner for a project at an existing business.
After the trial period and you have decided you have found the right business partner, make the partnership official by drafting a partnership agreement. The agreement should outline the structure of your business and the arrangement between the two of you as partners. This agreement should cover the following:
- Business idea and goals
- Salary and compensation
- Roles and responsibilities
- Equity breakdown
- Intellectual property
- How disputes are settled
- Exit strategies
Having the items above lessens the risk of confusion about leadership, lack of alignment, questions about ownership and unclear expectations and rewards.
Before finalizing everything, consider working with a business attorney to help you through the process and ensure that everything is legal and binding.
Have we missed anything or have any questions? Get in touch
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You might also enjoy these popular startup growth-related articles How To Increase Profits In A Company, International Business Market Entry Consulting Partner and A Guide To Startup CEO Mentoring on a similar topic.
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