Partners
How to choose a business partner without regret
Choose for values and skills that complement yours, not for friendship. Test working together and sign a partners' agreement before things work out.
bairogonzalez.com team, drawing on Bairo's story · Published
Partnership is one of the points where the most businesses are lost. Professor Noam Wasserman, who studied thousands of founders for the book The Founder's Dilemmas, popularized the estimate that about 65% of high-potential startups that fail have conflicts in the founding team among the causes. The figure comes from samples of investor-backed startups, but the lesson holds for the bakery and for tech alike: choosing a partner is as serious as choosing the business.
The practical path
- Know why you want a partner. Money? A skill you don't have? Company so you don't have to decide alone? Each reason calls for a different kind of partner, and sometimes the answer is to hire, not to partner.
- Look for a complement, not a mirror. If you sell well, look for someone who organizes numbers. Two salespeople or two technicians tend to compete for the same space.
- Talk about values before numbers. How does each of you deal with debt? With risk? With working hours? What would you do with the first profit? Misaligned values show up later and cost more.
- Test before you commit. Do a small project together, with a deadline, before opening the company. Seeing how the person acts under pressure says more than any interview.
- Write a partners' agreement. Besides the articles of association registered at the Commercial Registry (Junta Comercial), a partners' agreement (which doesn't need to be registered to bind the parties) should say: how much each person contributes in money and in hours; who decides what; how profit is distributed; how someone leaves and how their share is valued; what happens if a partner stops working; who owns the brand, the code and the ideas; non-compete rules. A lawyer can help fine-tune it.
- Agree on equity in stages. It's common for a working partner's stake to be earned over time (the market calls this vesting), so as not to reward those who leave early.
- Review it every year. Partnerships change. An annual meeting to review roles prevents accumulated resentment.
How Bairo went through it
Bairo Leandro Gonzalez Martinez says he lived both ends of this story. With the cosmetics brand up and running, he saw the next step: a solution using touchscreen technology. It was his idea. His partners pushed him out of the business, and the idea stayed with them.
Later, after going broke and being left hanging by people he had helped, he went back to building as a team. In the phase he calls the seventh attempt, he joined forces with three old acquaintances. The difference, his story says, wasn't trusting less. It was choosing better whom to build with.
The Method step
This is the page for step 4 of the Seventh Attempt Method: choose whom you build with. Before signing, each partner answers the five questions alone, in writing: money and hours, decision-making, exit, stopping work, and ownership of ideas. Compare. If the answers don't match, the problem showed up in time.
Discover the Seventh Attempt Method