Should You Be Business Partners?

Choosing a business partner is one of the most consequential decisions you'll make as an entrepreneur. Research shows that founder conflicts rank among the top reasons startups fail, alongside product-market fit issues. Yet most potential partners rush into agreements based on excitement about an idea rather than methodically evaluating compatibility.

Here are five essential questions to explore before making that commitment:

Great Questions

1. What does success look like to each of you? Are you building a $100 million revenue business in 5 years with the goal of an exit, or a $10 million cash-flowing business in 8 years that you’d like to hold for two decades? Misaligned visions are partnership killers.

2. What season of life are you each in right now? One partner may be happily single and ready to work 100-hour weeks, while the other has family responsibilities they take seriously and cannot feasibly match the 100-hour week grind. Neither circumstance is wrong, but the mismatch can create resentment. Be honest about your current capacity and priorities. (Note: I had 3 kids under 4 years old in the early years of Corvus so it's possible to be a good parent and successful founder but be mindful of expectations with your spouse and business partner(s).)

3. Where do your skills overlap, and where are the gaps? If you're both marketers, who's handling operations? If you're both visionaries, who's executing? Map out everything the business requires and see how well you complement each other. Ideally, you both can focus on what you do best and trust the other to execute on their part.

4. Have you both faced and overcome adversity—ideally together? Building a business is very difficult. You need to know how your partner responds when things get tough. Have they faced significant challenges before? How do they handle conflict? Better yet, have you faced adversity together? Your response to past difficulties predicts your response to future ones.

5. What do your closest advisors (including spouses) and former colleagues say about each of you and the opportunity that you are pursuing? They know you well and may see red flags that you're missing. Conduct intensive reference checks with people who have worked closely with your potential partner. How do they handle stress? Are they reliable? Past behavior is the best predictor of future performance.

Great Finds

"There is nothing worth doing that is not scary. There is no one who has achieved greatness without wrestling with their own doubts, anxieties, limitations, and demons." 

— Ryan Holiday, Courage Is Calling: Fortune Favors the Brave

If you received this newsletter from a friend, you can subscribe here: [LINK]

Onward!

Mike