10 Partner Qualities to Test Before Sharing Equity
A while back I talked about how and where to find a co-founder in “For a Startup, Two Heads are Always Better Than One.” The feedback was good, but some readers asked me to be a bit more specific on attributes that might indicate an ideal startup partner. Even if you are looking in all the right places, it helps to know what you are looking for.
In this context, I’m broadening the definition of partner from co-founder to “business partner.” The reason is that good attributes apply equally well to “external” partners, as they do to internal partners, like a co-founder or CTO.
In all cases, the challenge is the same, of finding people that you can work with and enjoy in the business relationship. The relationship has to have trust, communication, and respect in order to work. Otherwise, like a marriage, it will be doomed to constant conflict, second guessing, and unhappiness. So the following attributes have to apply to both sides of the partnership to work:
Beyond the core team of two or three startup partners, every startup should seek to “outsource” the rest of their strategic requirements to external business partners. It’s faster and cheaper than building a large team in-house, and usually more effective.
By using this checklist, you should be able to objectively match potential partners with your own needs and expectations. Then, as I suggested before, it’s time to establish a formal agreement or contract to cement the partnership. With that, you will have a strong foundation for success, as well as a great working relationship for the next thirty years.
Marty Zwilling - CEO & Founder of Startup Professionals, Inc.; Callaman Ventures Board Member and Executive in Residence; Advisory Board Member for multiple startups; ATIF Angels Selection Committee; Entrepreneur in Residence at ASU and Thunderbird School of Global Management. Published on Forbes, Harvard Business Review, and Huffington Post.
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- Enjoy working with other people. You may be too independent to be partner material. If you find it hard to trust others, love to work alone, always have to be in control, or insist on micro-managing, you probably won’t find a partner who will satisfy you.
- Does not need to be managed. Good partners are people who are confident in their own abilities, and willing and able to make decisions, take responsibility for their actions, and able to provide leadership, rather than require leadership.
- Compatible work styles. Most entrepreneurs work long hours and weekends to get the job done. If you team with a partner who likes sleep until late morning, and reserves the weekend for other activities, the partnership will likely not work.
- Common vision and commitment. It doesn’t take long to sense someone’s real commitment, or vision and desired outcome of a joint project. Is your project seen by both as an end in itself, or a means to another end?
- Similar values and goals. If one of your core values is exceeding your customer expectations for quality and service, and your potential partner ascribes to the low cost, high profit mantra, a successful partnership is highly unlikely over the long-term.
- Level of integrity. High levels of integrity are important in business, but more important is your level of comfort with your partner’s integrity. This is a critical element of a good relationship, but a tough one. This is probably the best place to apply your “gut” feeling.
- Complementary skills. If both of you are experts at software development, even though one loves design and the other loves coding, that still won’t get the marketing done. Look at the big picture first of development, finance, and marketing/sales.
- Passion for what they do. The passion has to be in the business context – meaning results oriented, customer oriented, and sensitive to competition. In many cases, experts with academic or research credentials are not good partners for a business venture.
- Ethical and diversity boundaries. How the leaders of your company handle adherence to the spirit as well as the letter of the law will be seen by all employees, customers, and investors. Ethics and the view of personal boundaries should be explored fully.
- No historical baggage. Partner decisions are more important than hiring decisions. Thus you should do the same or more due diligence on educational background, previous work, and references. Look impartially from all angles and do the follow-up.