Choosing Cofounders

Going into business with someone is like getting married: the success of the endeavor is dependent not only on you but also on your partner. Their vibes matter. As you’ll be working with them every day, all day long, hopefully for several years, the dynamic between the two of you will inform your experience at the office. In order to enjoy the ride, you’d better be of the same or similar mindset. If you dissolve the partnership, it’ll be just like a divorce: your partner will usually get half the company’s assets, and the breakup may kill the company. Thus, before founding a company, your most important task will be not to find a cofounder, but to find a good cofounder.

Put in the Work on the Front End

I’ve seen many instances where something was clearly not working during the initial partnership negotiations, yet the potential founders would let it go, jumping into the venture despite the bad signals and negative gut feelings. Please don't do this.

I believe that finding a good partner is more important than finding a good business idea. In fact, if you have an idea for a business – and even some potential customers – but you haven’t yet managed to find a partner (even if you’re offering half the company to them), then something is definitely wrong. Perhaps you can’t find a good cofounder because your (good) idea doesn’t sound compelling enough, or because you don't know how to sell the dream. You need to ask yourself what’s wrong with this picture ASAP. Be brutally honest; if you lie to yourself, you’ll only be wasting your time.

I’ve met business owners who preferred to keep their idea and give up on their partners. I’ve seen partners who knew they weren’t getting along well but believed it would get better (spoiler alert: it never will), and thus suffered in a bad partnership for years. Perhaps some in this position will wake up one day and realize it's time to leave, but sadly, most won't. I guess they don't have the courage to face the fact that their partnership failed. It's hard, but what are founders for if not to make the hard calls? Staying in your comfort zone will keep you in a no-win situation.

Yes, you can go solo. I know great founders who did, and it worked for them. But I don't believe it's worth the headache. For one, you have no one to share your burden with, or to consult when making a difficult decision. (It won’t be just as good to speak with your shrink; she doesn't have a stake in the company like you do.) But more important, I believe in having fun on the journey, so I’d rather be accompanied by great people I admire.

Let me reiterate: Things don't get better in business relationships. What you see is what you get from day one. This can be a whole discussion on its own, but I'm pragmatic; I don't have the time to fix problems with my cofounders before they legally become my cofounders. I’ll have enough problems on my plate, like selling the damn product, raising capital, recruiting people, and managing them. This means that once I complete a task, I try to make sure it has a solid foundation so I can move on to the next one without looking back. Having the right cofounder in place for the journey is critical, as it's the foundation for the whole company. It’s literally called founder for precisely that reason.

What I'm Looking for in a Partner

• A good personality, someone I can trust when I’m away.
• An expert, or someone with a very strong background in the appropriate sector (security expertise for cybersecurity, a background in finance for fintech, etc.). Extra points for quick learners.
• Worthy of being a founder: independent, capable of driving the company, hungry for success, someone people want to work with.
• A game-changer: capable of solving problems and creating value on their own.
• And obviously, a work style that complements mine.

That's it. Not too tall an order, huh?

What I Don't Want to See in a Partner

• Thinking they're always right, enjoys arguing for the sake of argument.
• Being an asshole or displaying improper behavior even if they're phenomenal in their craft.
• Being greedy, or having a lack of self-integrity.
• Disrespecting or undervaluing others.
• Believing their ego and personal success matter more than the company’s success.

What I hear over and over again from business associates is that they pick up a bad signal in the "Let's check if we're a good fit" stage, but then decide to ignore their gut for the sake of "OMG, let's just f@cking do it already!" Being too eager dulls your senses; you get too excited and either don’t check thoroughly enough or don’t want to face facts.

A Few More Tips

Don't “give a chance” to a cofounder; either they're a good fit or they’re not. Don't sabotage the dream company you want to start. If you’re in doubt about a potential partner at this stage, they’ll probably let you down in the future.

This one is super-important: Ask yourself whether a potential partner would be better as an employee (even as an early recruit with lots of stock options!). If your answer is Yes, it means they're not cofounder material. There’s nothing wrong with hiring them. Just don’t let the excitement and need to find a partner blind you to their true calling.

Normally, I like to work with and get a feel for a potential business partner for a few days at least, full time, in the same office (remote isn't okay, because it’s too hard to get a good feel for someone when they’re not physically in your presence – and this is super-critical for the evaluation process). I want to see how they work, whether they're a team player, whether they finish their task down to the last tiny bit (but don’t overcomplicate things), whether they're fun to be around, and whether they're independent and contribute to the task at hand.

People ask me what I work on with a potential founder if there's no company or tasks yet, and my answer is that I come up with something relevant, such as writing a deck together or researching the market. It's also okay to give them a problem and observe how they work out the solution, whether they have a method, whether they know to document it, explain it, separate technology-speak from product, and so on. There's so much you can learn from working with a person for a short time! Just be alert, wary, and honest with yourself, and you will know whether there's a fit. It has to feel good, as simple as that.

Vision and Division

Last but not least: Find out the candidate’s business philosophy in terms of what they want from the company you're hoping to start together. If one founder is a rich second-timer and one a scrambling first-timer, your interests might not be aligned. Having different visions isn’t necessarily a deal breaker, but make sure you discuss it! Have both of you answer the following question in writing: “What does success for me and for the company look like?” Read your answers out loud and discuss them.

Talk about the company’s vision (not its goals and objectives!), articulate your values, and describe how you want to run the company. Make sure your potential partner is on the same wavelength. Discover whether you're both committed to the long term. Do not postpone this critical step.

Make sure you can agree on roles and responsibilities. Not all partnerships require or deserve an equal piece of the pie (i.e., stock) among the founders. It’s okay to give more to a founder who will eventually bring more value to the business. In order for you to live with whatever division agreement you’ve drawn up, it needs to make sense to you.

I will conclude with a personal story. When I founded my first business, I knew my equation for success was good people + strong technologists. I therefore emailed about fifteen friends from the army whom I really liked and thought highly of. Out of this group, five of us ultimately worked together, for half a year, doing everything in the business – even cleaning the toilets ourselves (not much income or activity in the beginning, and somewhat on purpose, I won't lie). I was able to determine who was in for the dirty work and who was avoiding it (remember: it's not only about the sexy stuff). It was obvious who should stay and who should leave.

There were only two partners left. But we got along so well that we’re thinking about coming up with a second company one day...