5 Questions To Ask Before Shaking Hands With A New Business Partner
Once you find the right business partner, the relationship becomes something like a marriage.
In the best partnerships, you’ll find a deep level of trust and awareness of the other party’s goals and values. Everyone involved is invested in building something together for the long-term.
In the worst, the partners are distrustful and disconnected. No one really knows how the other party views the venture.
There’s no right way for people to come together.
But the key thing I’ve learned from my experiences building four businesses is the importance of all partners being in an abundant, stable mindset.
You need to know who you are and what you want to attract before you’ll find the right partner and the right opportunity.
A good start is to ask these five questions before getting in too deep:
1. What are your motivations for this partnership?
It’s actually a smart idea to flat out ask potential partners about their motivations and values.
Why are they interested in this venture? Are they trying to build a billion-dollar unicorn, or are they just trying to put their kids through college and make sure everyone has health insurance?
The current startup climate encourages a mindset of constant, unchecked growth. That’s what makes a company “successful.”
But success is a relative term, so you have to figure out what works for you and your potential partner.
Not everyone is trying to build something just to sell it.
The best partners that I’ve worked with in the past are humble, and clear about their motivations and values. Understanding where each person is coming from and what your reasons are for working together is of the utmost importance for a long-lasting partnership.
2. How do you see us dividing ownership?
This question matters both when it comes to decision-making and responsibility, and when it comes to the percentage of the company each person will own.
In some cases, a partner may call you a “co-founder,” but he really just wants to hire you, give you 5% of the company, and get as much work out of you as possible. Some people are fine with that.
Personally, that mindset rubs me the wrong way.
If you are a solo founder, it makes more sense to set aside that additional founder’s share for your team members. If you are a co-founding team, try to get that split as equal as possible. You’re in it together for a marathon, not a sprint. And when resentment builds because you gave your partner 5% less, you might regret it.
For any partnership, it’s important to know up front if you’ll be equal partners—or if one person is going to have more leverage.
3. What’s important to you right now?
When you work with someone can be just as important as what you’re working on.
People go through periods of instability or doubt in their lives that can mar an otherwise good business partnership.
When I started my second business, to be quite honest, neither my business partner nor I were in the best place in our lives. We didn’t have time or energy to establish a high level of trust and that worked against us from the very beginning.
While no one is perfect, it’s always better to partner with people who have a stable personal life.
You don’t necessarily have to pry into the intimate details, but if you spend enough time getting to know someone, you should come away with an understanding of where their mindset is right now.
4. Have you worked through past issues or difficult times?
No business partnership is without its difficulties.
But if you’re working together based on a shared passion for an idea, with the same motivations, then it’s possible to work through issues as they arise.
Unfortunately, it’s also possible to find yourself in a situation where those issues can become insurmountable.
In one of my past ventures, a fund hired our co-founding team to build the company. And while it grew and found product-market fit, it struggled culturally because we were trying to build trust within the leadership team. That was incredibly difficult because no one had any history together, and we were immediately thrown into high-pressure situations — making difficult decisions that would be hard for even the closest group of founders.
Again, we simply weren’t able to build the necessary level of trust. And, critically, because we had all been hired by someone else rather than coming together organically, we didn’t all have the same goals.
5. What are your goals, both personally and professionally?
You need to understand where your potential business partners are coming from, and where they see the company going in the future.
Thankfully, this question can reveal a lot more than goals. I was on a call recently with a potential partner, and I’d seen some red flags in his behavior — erratic communication, calling at all hours, sudden deluges of emails. So I asked him point blank what his goals were for this company. Immediately, he snapped at me and said it was an inappropriate question. That response in itself was an answer.
Sometimes you know right away when you click with someone, but in other cases, it may not be as clear whether this partnership will be right for you. Usually, it’s easier to ask the tough questions straight up.
The way a potential partner reacts to your candor and these questions will usually tell you more than enough to make your decision.