Startups · Finding cofounders

A meeting with potential co-founder (business) is coming. How to be prepared?

Nataliya Starostina Product Marketing Manager consultant

April 29th, 2016

I have a meeting scheduled with a potential co-founder/partner. He says he can bring his business acumen, connections and experiences ( three co-founded start-ups). He sounds serious and seem credible. He wants to discuss legal structure, business plan and rather confident on technical side, even though he haven't seen my technical proposal. We are talking very early funding and founding stage. I have to add he has advanced technical degree and MBA.

On my side, i have technical plan to develop prototype, business plan and industry connections, including potential feasibility proof (tba next month). I did a lot of leg-work trying to bring funding in, a lot of feedback, little funds. This is not a software project. It's all about nano-measurements. I am very passionate about it.

What do you suggest me to look out for? concerns? questions? expectations?

your insights are welcome,
Nataliya

Andrew Lockley

April 29th, 2016

Go and have a beer and see if you get on. It's more important than anything else. A

Anonymous

April 29th, 2016

Think of this as a date. Team risk is probably the highest risk factor in a new venture: you'll need to share a lot with this person in the years to come. Get the sense that you can trust him above all. And fail fast: if he doesn't seem right, he probably isn't.  (For you, that is.)

Michael Leeds CEO & Founder

April 29th, 2016

I would keep it very simple at this point with an agenda of determining whether he can add value to the team and whether you would want to work with him. Tell him what you are up to, why you are passionate about it, and the areas where you need help. Ask him to tell you about what he likes, what he's good at, and what he thinks he can bring to THIS venture at this stage. I think you will learn more from this than anything you will learn from a comparison of degrees. --ml ---------- ​Automating Video Creation @ http://www.r3lish.com/

Ema Chuku Designer. Product Developer. Founder @ NuPad

April 29th, 2016

Not sure what his college credentials has to do with his natural ability to make a good partner. That said, keep it natural and talk about life stuff.. Business topics later. If you are going to have a cofounder better be someone you can connect with on personal terms, not just on paper terms..

Like @Andrew said, go have a beer. Save the excitement for later.

Mike Moyer

April 29th, 2016

Beware of valuations and fixed-splits!

Valuations at this stage are futile. They wild guesses about the future that will never be true (you'll either fall short or surpass your expectations).

Similarly, a fixed equity split will set you up for future problems. A fixed split is when chunks of equity are doled out at the outset of the venture. For instance, he might propose a 50/50 split. This is fine when nothing has happened, but what if you do all the work? What if you want to bring in another partner? What if he expects you to pony up the cash? What if you do pony up the cash and you spend it all?

Every time something changes, you will have to go through a painful renegotiation of your split.

Use the Slicing Pie model instead. The Slicing Pie model ensures that each person's % ownership of the equity is equal to that person's % of the risk taken.

Slicing Pie is a dynamic model that guarantees each participant has exactly what they deserve. 

I've written a book about how it works. Contact me through SlicingPie.com and I'll send you a copy. Read it before your meeting!

Judith Hurwitz President & CEO Hurwitz & Associates

April 30th, 2016

I think that you need to do a lot more due diligence before getting involved with someone you don't know. Who is this person? What is his track record? What do others say about him? You probably need to trust yourself a bit more and move your project further along. Set up an advisory board of people you can trust. You need to own your project and your idea before you move quickly with a partner who may or may not be trustworthy.

Bill Johnson CEO at Basin Energy Group

April 29th, 2016

Don't jump into any agreements until you are satisfied that you are compatible. Make sure you have him sign a non disclosure agreement before sharing detailed technical information.

Ken Anderson Director, Entrepreneurial and Small Business Development, Delaware Economic Development Office

April 29th, 2016

Treat this like a blind date set up by your over zealous girlfriend and she has promised never to do it again without your permission.

Keep it light, make no irrevocable commitments, and trust your God given instincts.

Is this person who he says he is and can you easily verify it. Use referrals but don't rely on them. Do your own due diligence.

Is this someone to whom you will be connected to the hip doing one of the hardest things you have ever done in your life?

Sudhakar Atmakuru CTO, Director (Business & Marketing) at JT TechnoSoft

April 30th, 2016

You have got a very good response and advice already as above.
A few cents from my end, as I am in similar shoes.

Working as a partner or co-founder is a long-term commitment, and both (or more) should have same passion and commitment to reach the common goal.
I would be more inclined to chose a long-known friend who understands me well with similar understanding, passion and interest. But it is not possible in all cases.

Since you are the primary founder of the business and you are inviting another to come aboard as a helping hand to build and grow (with same passion and commitment), you better should know what exactly you are expecting from your (prospective) co-founder for building the business.
As advised above, dont be hasty and dont talk too much about your business idea or whole complete business plan in the first date itself. I would rather start with a nice friendly chat discussing his goals, past experiences and how his expertise could help my business. Even if my business idea is part of the conversion, I would not disclose the whole idea or business plan in complete details, rather I would try to know more about his expertise, his industry experience, how suitable it is to my line of business, his experience of how he had/would approach a VC or Angel for investment, etc.
He should also be able to understand your business idea and his honest feedback on it. Because, without understanding your business idea or technical proposal (ie, your brainchild), he would not be able to present the idea well to any VC or angel for raising a strong financial help.
Importantly, as a partner or cofounder, how far he could go with you in up and down phases of the business and his commitment for his mutual/financial help to shape up the business as you planned.

If all go well with this preliminary phase and you find him is a very good fit to your interests and objectives, then go for an advisory board for further steps.

I would like to know how it went and whats the outcome of the blind date. May be a good-to-know lesson for me too. Please update.

All the best.

Ravi Shrivas Digital Marketing Consultant at CSATZ Consulting Pvt Ltd

April 30th, 2016

I would suggest before even discussing about the legal terms ( shares and investment) you need to check on many more aspects:

  • If you are compatible enough to work together for a very long term, specially during testing situations.
  • If your skills really compliment each other
  • Do you find the person trust worthy and is he really capable of delivering what he is committing

For this I'll suggest its a good idea to have few meetings and to work on some smaller project within your business together, then based on results analyze and take next steps.