by Kristen McLean and Emily Gonzales, Miami Sharp Skirts
So you’ve got a killer idea. Great.
Now you’re facing the next trickiest question any early-stage entrepreneur faces—how can you find a partner to help get your idea from concept to reality?
There are many good reasons to seek out at least one partner: 1) to get yourself some support; 2) to broaden your idea-pool and bring in fresh perspective; 3) to deepen your skill-set and enhance your resources; and 4) to spread the inherent risk of a start-up over a team rather than an individual, and hopefully share the corresponding rewards of success when everything takes off.And that’s the crux of it. Every new business is inherently risky, and the act of building a successful venture from the ground up is one of the most challenging things you will ever take on. It will be full of uncertainty, emotional break-points, and a million different decisions that demand your attention.
Under those circumstances, finding the right co-founder or development partner is critical. Although we can’t claim to be experts in this area (being new entrepreneurs ourselves) we can pass along some excellent advice which has come our way through our wider professional experience and research up until this point.
This advice falls into three categories:
• Where to look for a co-founder
• How to pick the right co-founder
• How to protect yourself should things go wrong
Where to look for a co-founder
In an ideal world, you would already know someone with an entrepreneurial spirit and passion for your idea along with the desired technical expertise that fits perfectly with your startup needs. You and this brilliant person would have complementary skills that fit together like two pieces of a puzzle. Of course, in this perfect world, you would trust this person’s ethics, judgment and decision-making process.
Unfortunately, this scenario is rare and finding someone who matches even part of this description is very difficult. You will need to launch a search, and here are some suggestions for getting started.
It’s hugely beneficial if you and your co-founder live in the same area, so start locally and tell everyone you know that you’re looking for someone. Leverage your network. You never know who the people you know are connected to.
When describing what your startup needs, be as specific as you can in regards to the types of skills and background your co-founder must have. Don’t just say you’re looking for a programmer. Tell people what this programmer should be able to do, build and if possible, how you want them to do it.
Start attending meetups (www.meetup.com) for the technical skills that you’re looking for. Even in seemingly non-technical markets, you’ll be surprised to find developer and programmer meetups for all the popular platforms. You’ll also find meetups for small business interests and various specialties. At these meetups, you’ll find people with varying levels of expertise and a wide array of entrepreneurial goals. You’ll be able to speak with many potential co-founders as well as learn more about the specific technical skills your startup needs.
Looking for a co-founder online might seem more risky than the methods that allow you to meet with someone in person. But taking the proper precautions and then diving into the internet to broaden your search could help you find exactly what you’re looking for.
The website Techcofounder.com is specifically geared towards matching co-founders. Websites specifically for startup jobs, such as Startuply.com, Jobnob.com, and Startuphire.com have already attracted people that are interested in being part of a startup environment. You can also try contracting small projects out to potential co-founders on VWorker.com to test out their technical skills and see if they would be a good fit for your startup.
And don’t forget about LinkedIn. It’s a great place to search for the types of skill sets and backgrounds you’re looking for. It’s acceptable to reach out to them in a professional manner, even if they’re currently employed. You never know who’s just waiting for the right time to scratch an entrepreneurial itch.
How to pick the right co-founder (for you)
In looking at potential co-founders, you will need to ask the obvious questions about how this person might enhance your project with skills, knowledge, or resources. That will be the easy part. It’s much harder to pin down the intangibles.
Picking a good co-founder is a lot like picking a spouse. In the enthusiasm of the moment it is easy to lose sight of less exciting questions like, “Can I work shoulder to shoulder with this person for ten years or more?”
Tech writer Andrew Chen has a great post on this where he frames the question in-terms of “inside” versus “outside” personalities—if you are good at focusing on internal company issues, look for someone who has the temperament and skills to focus on the public face of the company, and vice-versa. Look for a “yin” to your “yang.” Also, he points out that there is a difference between an employee and a co-founder—with a co-founder, you want someone who can give you some pushback, and who is not afraid to offer advice and suggestions.
Although it may sound like a joke, it’s a good idea to think about being “married” to anyone you are considering bringing onboard. After all, you’re going to be entering into a legally binding contract with them.
Ask the same questions. Do they share your values? Are they reliable? Can they be honest? Can they be supportive? Do they respect you and your idea? Does their work style compliment your own, or work against it? Do you genuinely “like” them?
Usually, in relationships as intense as that between co-founders, it is the unspoken and the less concrete qualities which ultimately cause the problems.
Zappos founder Tony Hseih summed it up nicely in a NYT article earlier this year when asked about his hiring process for top executives:
It’s not just a single day with them and you make a decision. We’ll invite them to barbecues on weekends and they bring their families, and just hang out, or go to dinner or happy hour or whatever. It’s more just about trying to get a sense of who they are outside the office, I guess, and whether you feel like you can actually get to know them on a personal level or if they’re very professional and standoffish.
If it’s the latter, then it’s probably not going to be a good fit for us because, at the end of the day, what matters most is how deep of a relationship you can develop with them. For someone who’s not comfortable being themselves, that kind of puts limits on how close of a relationship you have.
So, our best advice? Don’t rush. Dig deeper. Ask the hard questions. Listen to your gut. Go in with the expectation that you’re not committing to anything in the first meeting, and say so up front.
Here’s a good litmus test—in the course of a conversation, do you feel safe enough to talk about your own weaknesses, fears, eccentricities, or desired outcomes honestly? Can they? Do you feel that they are listening and interested? If the answer is no, then you either need to spend more time exploring, or pass on any future partnership.
After all, the time for soul-baring is now, before you make a commitment, not when you’re in a difficult situation with your back against the wall.
How to protect yourself should things go wrong
Okay, so you’ve found someone you think will make an ideal partner. Everyone is excited, energized, and ready to go. Now what?
Well, the single best piece of advice we have is to make sure you back up all those warm and fuzzy feelings with some solid paperwork.
Make sure you hire a good lawyer—perhaps even three lawyers, one for the company and one for each founder—and go the distance to make sure the terms of your partnership are clearly expressed in legal form.
You will be faced with the decision of incorporating your new business as an LLC or a Corporation (for a quick explanation of the differences read this). An LLC has the advantage of being light and nimble, without many of the formal requirements of a Corporation, while still granting tax and liability protections to its owners. Many new businesses opt for this structure because it’s the easiest to get going.
However, if you expect your business to grow to any size, the LLC has one major drawback. It is governed by a founding document that is only as good as the language inside it.
Many times, these agreements do not have sufficient terms to cover what happens in case of owner or investor problems. And it is naïve to expect there will never be any disagreements or exits. Under an LLC, if problems arise and the document is not robust or specific enough in addressing them, it can be very costly in terms of energy and money to resolve the problem. Many small businesses don’t survive it.
On the other hand, using a Corporation insures that there is a mountain of case law and legal precedent about how a company is governed, how it reports, and how shareholders can resolve disputes and undertake exit strategies. You can specify who is majority shareholder, and how disagreements will be solved between partners.
All that protects everyone under that umbrella—you, your partner(s), and anyone who invests with you. If there is a problem, there is usually a clear path to resolution. That’s a nice solid foundation to build a business on.
After that there’s nothing left to do, except to get to work. Good luck!
Kristen McLean is a publishing-industry strategist and the Executive Director of the Association of Booksellers for Children (ABC), a non-profit trade association established in 1984. She is also the co-founder of Bookigee, a new tech start-up launching in January 2011. Kristen is deeply interested in the confluence of consumer behavior, education, technology, and publishing in the 21st Century. Find out more at www.kristenmclean.org
Emily Gonzales is currently a contributor to many companies’ bottom line, working on a contingency basis as an Expense Reduction Consultant. Prior to that she was a designer, builder, tester and fixer of wireless products, otherwise known as an RF Electrical Design Engineer, at Motorola. On the side, she’s busy running a streetwear company, Wizdum Designs, writing a Women-In-Tech blog, TechFemme, and trying to exercise every day. She is passionate about life, specifically the internet, technology, business, entrepreneurism, sports, travel, and making lemonade out of any lemons thrown her way.
