I GOT 99 PROBLEMS BUT A TECHNICAL CO-FOUNDER AIN'T ONE. 50+ QUESTIONS WORTH ASKING POTENTIAL CO-FOUNDERS
My Co-Founder is a dope biz partner and great friend. Having a Co-Founder is like being in a marriage. Like anything in life, luck was on our side when we met. We’re blessed AF. In our early days, we asked each other many questions, but not nearly as many as we could have.
Over the past 8+ years, we've both gone thru divorces. We’ve both experienced having nowhere to live. We’ve been roommates. We know each other so well that many think he's my husband. He’s an incredible human being, business partner and friend, but it's totally platonic :)
I spent 4+ yrs doing buy/sell deals (buying & selling wealth management practices/firms). Being a self-taught investment banker earned me the title “The girl that moves money”. In Aug 2021 – with transactions totalling over 5Billion in AUM - I stepped away to start Matr Ventures
During those 4 years, I witnessed struggles & breakups that came about from partners having different investment philosophies; focusing heavily on investing existing assets vs bringing in new assets; putting their needs ahead of clients; or wanting the title over doing the work.
Here’s a list of great questions to ask prospective Partners and Co-Founders. You’re not likely to ask all the questions, but ask as many as possible. Leave your comments and add other great questions to the list.
Why do you want to build a startup (in general and in particular, right now)? We all have ideas and dreams but do they align?
How does this help accomplish your life's purpose?
Why do you care about the problem we are solving?
Are you comfortable working on the team for a few months before becoming co-founders? Consider working on a product for six months before committing to being Co-founders.
Who do we think the first five hires will be? And why?
Why do you think we'll be good business partners?
What excites you most about working with me?
What excites you most about building this startup?
Are we allowed to take on anything outside of the company?
Are we both going unpaid, and when do we need this to change?
What is your runway and burn rate? Personal runway and burn rate matter, especially if one of the CoFounders has a family, debt, or other life commitments to consider. Be upfront and realistic about each other's lifestyle, living costs, and personal growth needs.
Can either of us fire the other?
Can we commit to an ongoing check-in to discuss our partnership openly and honestly on a weekly/monthly/quarterly basis? Exploring and documenting things before they become big problems can save the business. Business partnerships are like marriages.
How do we keep each other accountable?
What role do you expect to play in the company?
Can you outvote me or me? And why or why not?
When do we need to raise outside money? Now, in 6 months, two years? And how much?
How do you feel that I should contribute to the well-being of your family? What would you like for us to worry about, and what would you prefer to deal with on your own? Is there anything off-limits for us to discuss your family or romantic relationships? This discussion will teach the other where and how business and personal overlap.
Do you have any 'non-compete' agreements or clauses with other partners or companies that are active now? If yes, how long are they for, and can I review them?
Do you like to manage people? If yes, why? If not, why? What is the most significant number of people you've managed for over one year?
Do you sit on any boards? Any possible conflicts of interest with this venture?
Have you ever failed at anything? If so, how did you handle it, and what did you learn? If someone says that they haven't failed at something, I would be very concerned about their willingness to have candid conversations and the risk tolerance of the co-founder of a startup.
Have you worked and managed diverse teams, and if so, how? Dig deep here to determine experience or the person's views on the value of diverse teams.
How are we splitting equity? Are you ok with investing capital to have a lawyer draft a legal document? When possible, do this sooner than later.
How can we help each other succeed?
How can we support each other?
How do you deal with conflict? Compromise? The only real way to know this is to do a side-project or start working together. Fights are healthy; how you get through them is the question.
How do you envision the day-to-day work at this startup?
How do you feel in high pressured and stressful situations? How do you like to process and handle those moments? Do you need time before you respond, or do you want to dig in together?
How do you see this opportunity working in your overall career and personal path?
How do you think we should give feedback to each other (and the team)?
How has another partner burned you before? Based on that, what are some sensitive aspects you want to discuss?
How much equity are we allocating for future employees?
How would you define this startup's ultimate success for YOU? (revenue, exit, personal pride, etc.)
How do we handle it if one of us gets fired by an accelerator, board members, or others?
If you could pick three things to change and three things you learned from your previous companies, what would they be and why? Ideally, each person has to experience with their own or another startup - but experiences as employees will work too.
How do you describe the culture you want to create? Attend as many startup events, conferences, and offices as possible. These are great opportunities to identify and share what you observe, like, and don't like in those environments.
Under what circumstances would you be able to start working with the startup full-time?
Are you or am I the front-facing person to the public or investors? In situations where we can only have one person, who would that be?
Is there a part of our plan that we are unwilling to change? This could be geographic location, the product, the company name, the equity split, other Co-founders, etc. From my experience, anything can change, so if someone isn't open to that possibility, dig deeper to understand where they're coming from because this could be a problem that affects the partnership down the road.
How do we break a tie while there are only two co-founders?
How does your husband, side, partner feel about us being potential co-founders? Given how much time co-founders spend together, significant others should meet the potential co-founder. Not only do they know you better than almost anyone and can share their thoughts about the potential partnership, but they should also get to know the person you're going to spend a lot of time with.
What are our personal cash needs in the short term? Cash burn and runway are some of the most important numbers to know when assessing potential CoFounders.
What are our personal goals for the startup (e.g., a sustainable business spinning off cash and running it forever or high growth and some liquidity event)? Potential co-founders must similarly view each stage of the company's development and eventual exit or succession. At some point, it makes sense to create a legal document that outlines exit or succession plans.
What are some critical pressures in your life that would pressure the startup? Everyone has a life outside of the startup. List everything possible regardless of whether or not each party thinks it's important to discuss – or not.
What are some similar products you love and why? This step will help everyone understand what they appreciate and even aspire to – design, product, tech, biz strategy, etc.
What are the areas you know you're not particularly good at?
What areas do you see yourself wanting to be a point-person in for the first 12-18 months?
What areas/decisions would you like to have the final say in?
What concerns do we have about becoming partners? Are there weaknesses I should be aware of?
What hobbies do you have? How do you spend your free time?
Where do you think I add the most value to this startup? Make, compare and create a preliminary (and evolving) list to share.
What if an investor wanted to invest (or a vendor/partner would only work with us) but expressed that you weren't the right person? Assuming that the company needed the money, how would we handle that? Take a few days to think this thru and get back to each other.
What if one of us caught the other doing something unethical? How would we handle it? Are there any examples from that past where this happened? What do you consider 'unethical'?
What if one of us put our funds into the company and gave that person more equity overall? Or do we maintain the equity split we agree on no matter what? How will that play out in the future with our different roles? What are potential issues that could arise when those opportunities happen?
What do you do to maintain and improve your mental health? If either party can't answer this with certainty, commit to a monthly 30 min mental wellness check-in.
What is our expected time commitment for this startup now, in 6 months, two years?
What is the most attractive thing about this venture opportunity?
How long would you or your family be able to survive without a salary? Would you need to get another job? Do you have capital set aside if this happens? Cash burn and runway are some of the most important numbers to know when assessing potential CoFounders.
What if we fundamentally disagreed on a critical decision. How would we resolve it? Discuss a simple tiebreaker and document it or email each other to help resolve significant conflicts – should they arise.
What skillset or expertise are we missing that we need to succeed? Do we find another co-founder to fill that gap? Do we aim to hire someone now or in the future to fill these gaps? Discuss the importance and priority of these gaps before deciding on potential partners or employees.
What is your business 'love language'? How can we encourage each other? What's the best way to reward each other? How can we best recognize each other in public? Acts of service, gifts, verbal cheer, etc.?
What issues have you experienced in past partnerships?
How do you know when you're experiencing burnout? How do you deal with it? How can I support you when this happens? What's the best way for you to communicate to let me know when you're approaching burnout?
What would cause you to fire someone without question? If someone provides a cause, this could be a red flag. Firing someone without cause could mean that the person is a hothead, finds it challenging to deal with conflict resolution, and may be a liability to the company if left to their own devices.
Would we sell this for $5mm? $100mm? Are we waiting for the billion-dollar exit?
What other concerns do you have with this startup or me? There are no wrong concerns here. Every concern should be expressed and discussed to address the situation or acknowledge that a partnership between these parties may not be a good idea.