Thinking of Forging a Cofounder Relationship? Check These Tips

There are numerous factors that go into making a startup successful, including market need, a viable business model, financing and marketing, among other variables. However, finding the right team — particularly, the right cofounder(s) — is a crucial step. According to research, discord with a cofounder is among the top reasons that can contribute to a startup’s failure.

That said, finding a cofounder, or cofounders, is no easy feat. All cofounders must share the passion, long-term risk and opportunity, instead of simply getting paid to do a job. However, there are several ways founders can find someone with the skillset necessary to run a company.

How Can You Find the Right Cofounder for Your Business?

Apart from ensuring that you and your cofounder(s) have the same level of drive and motivation for your business, here are a few pointers that can help you find that perfect partner.

Define Your Core Values: Whether you’re choosing a vendor, hiring an employee or selecting a cofounder, a good place to start is by laying down a solid and well-defined set of core values. These values can help shape your goals, priorities and the decisions you’re willing to make.

Be specific. For example, define whether you are extremely competitive or more collaborative at work; or whether are you think of business 24/7 or want work-life balance. Avoid generic terms like integrity, honesty and quality, and focus on values that make you truly different from others.

Determine the Tradeoffs You're Willing to Make: Tradeoffs, or anti-values, are things you're willing to give up to achieve your goals. For instance, are you willing to give up security or privacy for the sake of transparency? Or are you prepared to work late and sacrifice your personal plans to meet tighter deadlines? Being upfront about these choices will let your potential partner(s) know what your priorities are and what you’re willing to forgo.

Make a Note of What You Want in Your Ideal Partner/Cofounder: Look closely at your own strengths and weaknesses when it comes to your business, and list the skills and experiences that would best complement yours. You could also seek input from seasoned peers and investors.

Successful businesspeople know exactly where they excel and where they struggle. They then surround themselves with the right people and the right environment. While it might be tempting to find a cofounder who has similar traits to yours, it's always a better idea to go with someone who complements you in the right way, for the benefit of your company.

Explore Various Avenues to Find Cofounder(s): Just as you would use your networks to find investors for your business, you can check out many of the same avenues, including entrepreneur forums, industry conferences and local business organizations, to look for a cofounder.

You can also join entrepreneur groups on such networks as LinkedIn, Twitter and Facebook, and interact with individuals who meet your criteria.

Alternately, you can sign up on online matchmaking websites such as StartupWeekend and CoFoundersLab to look for like-minded people. Here, you can pick up discussions with other entrepreneurs on the various business blogs, and you can let your interests be known.

Another way of finding a business partner is by attending local university entrepreneur activities. Student leaders and university professors usually know other entrepreneurs (these could be staff members or alumni) who are also looking for the perfect partner to match their own skills, interests and entrepreneurial ideas.

Jointly Define the Roles, Key Metrics and Major Milestones for Your Company: This process is a great test of the various working styles of all cofounders as well as a true shared vision. Building a business is tough and unpredictable, so now is the time to commit as a team. If you cannot easily agree on things now and work together, it will probably not happen at all in the future.

Discuss How You Will Handle Unpleasant Situations: Every business will go through difficult times, including cash flow shortfalls, fundraising difficulties, clients terminating contracts or employees leaving, and these are likely to put a strain on your relationship. If you and your cofounder have a strategy for dealing with challenging times, you’ll be able to weather the storm.

What About Conflicts?

Cofounders typically have positive chemistry and the best of intentions when launching a startup. However, if they end up stepping on each other’s toes all the time, things can get messy. And walking away from the business may not be the only solution to this problem. In fact, working together in order to divide the roles can allow them to each focus on their own areas and avoid undue conflicts. This has the added benefit of defining the roles for which each one is best suited.

Here are some tips on how you and your cofounder(s) can balance roles and responsibilities, and ultimately avoid conflict:

Define and Share Roles and Responsibilities: One way to minimize conflict between cofounders is to clearly define the roles and responsibilities at the outset to avoid any overlap by signing a cofounders’ agreement. The cofounders’ agreement should contain the name of your company and its owners, and provide information about your company. It should also list each founder’s responsibilities (for instance, who will be responsible for maintaining the accounting books, who will make the hiring decisions, etc.), business ownership, owner liabilities, how decisions will be made and so on.

It is important to agree on who has the final say in a given situation or what you will do if a disagreement should occur. It's essential to establish cofounder roles and responsibilities based on expertise. Every founder should have a specific skillset, and their job descriptions should match those skills.

Evaluate the job descriptions of all cofounders annually to ensure that the written expectations are in sync with the work the business needs to accomplish. Keep the focus on your business goals and don’t shy away from reassigning the roles and responsibilities.

Track the progress of all cofounders to ensure everyone is keeping up with the tasks assigned to them. This will keep everyone on the same page and organized. Don’t be afraid to discuss any shortfalls openly in meetings.

Address Conflict Head-On: If you ignore issues or wait too long to address cofounder conflicts, you might end up increasing the chances of them repeating, escalating or permanently damaging your partnership, and even your business. Therefore, as soon as any conflict comes up, set aside time to meet privately with your cofounder(s). Enter the discussion willing to understand your cofounder’s point of view. In addition, you should never discuss conflicts in front of staff members.

Create a Solution Together: If your cofounders’ agreement doesn’t detail how to come to a resolution in case of a conflict, work with your cofounder to evaluate the pros and cons of possible solutions. The best solution should benefit your company, and not your personal agenda.

You can also put decisions to a vote if you have more than two founders. However, if you absolutely cannot reach a solution to your conflict, you could involve a third party, such as a lawyer.

Tension between cofounders can hurt your company, so don’t let disagreements fester for too long. Remember, you need each other for the sake of your business, so iron out your differences sooner rather than later.