subject: How To Bring A Partner, Co-founder Or Coo Into Your Business [print this page] According to Cisco Innovators Forum guest blogger Bob Goedjen:
It's not unusual to realize that as a solo-preneur you've reached the end of your expertise and that you need to bring someone else into your business. Even if you have employees, there are times when a partner can share the load. But how do you find a partner, vet a partner, and protect yourself in such a critical relationship? I've asked our guest experts to give us their insights. We'll be featuring them over the following weeks. Here's what members of Silicon Valley SCORE had to say. ----
The general concept of a business owner needing additional help really depends on the big question of "Why." Since the answer to this simple question can be very complex and differ by the type and stage of the business, this means the "How" has as many variants. One common case is a technical startup company that has a single founder and needs additional co-founders to have a real team to get the company off the ground. In this scenario, there are really only two factors to consider - what is your desire for a close partner(s) and how will you get to know them well enough to make sure they meet all your expectations (and you meet theirs!) One common factor that many entrepreneurs run against is that many of the best partners or early hires may have more experience, opportunities, and plain "smarts" in many areas than they do. This bothers some as it means sharing not only the company assets, but sharing ego-related decisions as well. In my experience, those owners/managers that hire people that are potentially better than themselves end up improving their own capabilities.
When you start talking with potential partners, you need to have a plan on how to really get to know the person. The majority of successful relationships for partners and co-founders come from knowing each other in previous situations and therefore knowing both the skills and the personality matches that exist. If that's not the case, then the situation is not much different than starting a dating relationship with marriage as a future goal.
Some of the particular issues that are often asked can be:
Do I need to worry about protection and intellectual property?
Any conversations (again like dating) with potential partners need to talk about the general business, the customers, the competitors, and the business potential. Sure, you need to talk about the products and why they are better, but until the relationship develops, there isn't any reason to go into the technical details or special marketing ideas or whatever is key proprietary data. This is a general case that you must be able to describe why you have a great business potential without going into too many details.
And, like dating, there is no appropriate paperwork that works while you are developing the initial relationship. Like a pre-nuptial agreement, any such agreements must wait until the relationship as developed and there is a mutual reason to progress into secure detail.
You also need to protect the person you are interviewing. For example, it you have a great new marketing approach and the person works for a competitor, you shouldn't ask him if they have any plans that would counter your approach - that's asking him to breach others trade secrets.
How do I really get all the information I need on this person?
Again, the real answer to this is different for all situations. First, of course is to spend time making sure you know that the person has the background and interest in working with you and appears to be able to bring the skills and contribution you need. Then you start the difficult stages - chemistry between the two of you and background checking. The chemistry issues are very personal to your personality, but it's important that both of you understand your business and personal goals, your styles both in public and in stressful situations, and how your other factors (opinions, politics, education, etc.) can help or hurt the long-term relationship or don't matter.
Background information checking is important, but if you aren't experienced in this, it can be difficult. The obvious checks are where and who the person has worked for and what feedback you get from checking those sources. But that's just the beginning. Next you need to know how peers and subordinates view the person and their successes. An engineering manager's boss may think he's great because he's brilliant and has great ideas - but the marketing folks may think the products are always late and have bugs. Another manager's boss may think she's great, but the engineers think she just deals with the project functions and hasn't a clue about the technology. Be sure you are asking the right people and getting all the proper data you need.
If your potential partner will have outside interactions, talk to those he has interacted with - customers, investors, contract manufacturers, etc. Make sure the jobs went as expected and see if there are or were details that could cause trouble in your business.
Once you have confidence you have a good relationship with your potential new partner, you should make sure the feeling is mutual. Then it's time to discuss future goals and roles, as well as the appropriate compensation and reward system. If you expect your new partner to purchase part of a business, I hope you made sure the financial ability was there early in the discussions. If you are founders with plans to then attract investments and loans, it's time to make sure you know what assets you may each have to provide and what portion of the company you will both own and be responsible for going forward. This is also the time to talk about other key partners or employees that will be necessary for you to achieve your goals.
One potentially overlooked factor is the personal life of a potential partner. Before a deal is really concluded, both of you need to share with the other any possible problems (a divorce about to happen) or simple lifestyle things that can affect a business (6-week vacations in France each year.)
Now you are ready to conclude the deal. It's time to make sure you are very comfortable - it's tough on you, on the candidate, and on the business if this doesn't work out. Are you sure this is a position you want filled and this is the person for it? If there is any doubt at all in the answer to this, don't go forward. Many will say that having a partner (or filling any role) is better because you have new and more thinking. That's true, but only if it's pointing in the same direction and is constructive, not destructive. This may be as much to do with your personality and style as the candidate, but now is the time to resolve that.
On the last point, there are a number of entrepreneurs that simply want employees (hopefully good ones and not just "yes-men") and don't want partners or co-founders. If that's you, don't get into a relationship that's going to fail - it can bring extended troubles you don't need or want.
