Characteristics of a Great Startup Business Partner

September 9, 2011

A few months ago, a friend of mine introduced me to an American entrepreneur who was looking for a business partner to run a hotel in costal Colombia. I was looking for a new job, sick of the weather in Boston, and intrigued by the adventure, so I explored the opportunity with him via several Skype conversations while he scouted locations. Although I ultimately decided not to take the plunge (I thought I’d be in over my head as a first time entrepreneur in a foreign country), the process forced me to think long and hard about exactly what I was looking for in a startup business partner and what he was looking for in me. Obviously, the person should be passionate about the opportunity, have the right skill set, and be trustworthy. But the following traits are equally relevant when you’re choosing a business partner:

Charisma. Even if your partner will have little contact with the outside world during regular working hours (i.e. a developer), you’re going to need all hands on deck when you recruit talent, raise funds, and get the company off the ground. Larger companies can afford to be specialized and have their salespeople sell and their developers program, but at a startup that’s not the case. You’ve got to make the most of every opportunity you get to sell your idea.

A clear understanding of their strengths and weaknesses. Before you do anything else, make sure you’re both 100% clear about the division of responsibilities in your partnership. If you think your skills are perfectly complimentary, make sure they see it the same way. This will also help to identify weaknesses in your combined skill set that can be addressed later with new hires. Without a realistic self-assessment of your strengths and weaknesses, delegating responsibility as your company scales will get very messy.

A willingness to work for free. Ideally, you’ll both get handsomely rewarded for your blood, sweat and tears once the company becomes successful. In the beginning, though, you’re going to be working long hours without much to show for it. If your partner is willing to work hard ahead of the launch, when not being paid at all, it’s a good indication that they’re comfortable with the delayed-gratification aspect of working at a startup. Someone who’s reluctant to put in the hours before the company is official while working as a salaried employee is probably not a great fit.

A solid understanding of the risks, but the desire to take them anyway. If your prospective partner doesn’t like talking about worst case scenarios, chances are they’re not totally comfortable with the downside. Setbacks happen and you’ve got to be prepared and respond accordingly. You can’t have your business partner bailing when your problems are resolvable and the company can still be successful. On the other end of the spectrum, you don’t want someone who’s too obsessed with the downside, as they’ll run the risk of passing on good opportunities to grow the company. A person who has experienced both success and failure in their career might be the ideal partner, as they’ll be cognizant of both the risks and rewards of entrepreneurship.

Following my conversations with the entrepreneur in Colombia, I found that my prospective business partner actually satisfied all of these criteria fairly soundly. Our skill sets were complimentary and he was knowledgeable and enthusiastic. The deal breaker, as it turns out, was actually me. I didn’t have the experience to really understand the probability of success, and I was terrified of what the worst case scenario could be for a foreign entrepreneur in a developing company. Luckily, I came to this realization before getting too deep into the partnership and was able to withdraw without any hard feelings.

Behavioral Data Analyst

Nick is a Behavioral Data Analyst at <a href="https://www.betterment.com/">Betterment</a>. Previously he analyzed OpenView portfolio companies and their target markets to help them focus on opportunities for profitable growth.