Making Partners: The Cornerstones of Successful Business Development
- Anna Tarasiuk
- Mar 7
- 7 min read
Over 65% of startups fail due to co-founder conflict. Would your business partnership survive the test of time? Choosing the co-founder isn't just about shared enthusiasm. It's about trust, aligned vision, and clear legal agreements.
However, human relationships are complex. People have different work ethics, visions, and expectations. Partnering with someone, especially a friend, can expose unexpected differences that shake up what you once believed to be universal truths.
Before jumping into a business partnership, one should assess compatibility, skills, and long-term goals. Here are some key questions to help you determine if a partnership is built to last.
Pros and Cons of Making Partners with Colleagues & Friends
This is the first and probably one of the most important questions, and chances are — you won't like the answer. It's true that many business partnerships are formed between friends. Unfortunately, most of them fail somewhere along the road. In early 2024, we got a chance to witness this as best friends Becca Millstein and Caroline Goldfarb, went into a very public and very ugly law dispute over their co-founded tinned seafood company, Fishwife.
Conversely, some partnerships that start professionally evolve into strong friendships. For example, Ben Cohen and Jerry Greenfield founded Ben & Jerry's after years of friendship, and things are going pretty well so far. And we can only hope they will stay this way because Ben & Jerry's commitment to company culture and product quality is truly admirable. But one can never know what lies ahead.
All in all, making partners with a friend is a risky call. While many partnerships can evolve into strong friendships, the other way around usually does not work. Always ask yourself, what came first, colleagues or friends? If you and your prospective partner started as colleagues, came to be friends, and are now thinking about building a business together — the chances of success are very high — not certain, but still high.
But if you think of starting a business with a buddy you have never worked with before, think again. Chances are, you will lose both a partner and a friend — so the odds here are totally against you.
Still, some people do have an almost supernatural gift of turning any odds in their favor, and risk is a noble business. While many friendships struggle in business, those who establish clear roles, separate emotions from decisions, and document agreements professionally can improve their chances of success.
How to Protect a Friendship in Business:
✔️Define clear roles and expectations. Treat it like a professional relationship, not just a friendship.
✔️Have difficult conversations early. Discuss what happens if things go south.
✔️Put agreements in writing. Formal contracts prevent misunderstandings later.
Are Your Long-Term Visions Aligned?
First, most startups have a single purpose — not to fail. But what happens next, when the business is stable? How do you and your partner perceive long-term goals?
Here's a simple, specific example. Let's say you want to create a new product or service that has the potential to make this world a better place. Or, at least, it offers something new and useful. If your partner wants the same thing — excellent! You're good to go.
But what if your prospective partner wants to earn money? Sure, you and the rest of us want that, too, but some people prioritize money over business mission, value, sustainability, etc.
Such inconsistency between long-term goals and visions will inevitably result in mutual disappointment. Remember, businesses often endure years of financial struggle before turning a profit. If one partner is only in it for fast returns, they might become disillusioned when things take longer than expected.
How to Align Visions:
✔️ Have open discussions about where you see the business in 5-10 years.
✔️ Set mutual goals and milestones to measure progress.
✔️ Discuss exit strategies upfront — what happens if one partner wants out?
Do You and Your Partner Have Complementary Skills?
In other words, is there any hint of a symbiotic relationship? Every successful business needs different people who would take care of different tasks. You do not need your clone as a partner. Sure, starting a business with someone with similar (or at least adjacent) work experience is only logical. But, you must remember that company growth presupposes taking care of different business development facets.
So, let's give another example. Say you start a company making home-baked cookies. You are the baker. But the cookies have to be sold, right? So, your partner can take care of sales. This simple approach applies to EVERYTHING — from IT to civil construction. And, of course, it works in tech. A famous example is Apple's Steve Jobs and Steve Wozniak; one was a tech genius, the other a marketing visionary. Their different strengths were key to Apple's success despite personal tensions.
Quick note: the more complicated your business, the more diverse the responsibilities will be. Any large-scale project has more aspects for development than just 'doing' and 'selling.' As a rule, every new business can benefit from a partner experienced in sales and marketing. But that's not the only formula for success.
How to Ensure Complementary Skills Work:
✔️ Clearly define who is responsible for what; avoid overlaps and confusion.
✔️ Consider each partner's personality; is one of you more detail-oriented while the other focuses on big-picture ideas?
✔️ Be open to hiring experts to fill skill gaps as the business grows.
Once you've established complementary roles, the next challenge is ensuring both partners are open to bringing in new talent as the business grows.
Is There Room for Growth and Inclusion of Others?
Ok, so let's skip ahead to the pleasant part. You are succeeding, and you need to attract more people into your business relationship. Will both you and your partner be willing to share? And yes, it might come to the actual company shares — somewhere along the road. Plus, there will be the tension of working with new people — and, sometimes, seeing new partners grow more valuable than the old ones.
The last scenario often results in full-scale jealousy fits. Ok, we’re all grown-ups here, you say. This is just childish, this will never happen. Ready to bet on that? If so, just recall adults doing childish things, especially when emotions get involved. And, yes, it happens in business communication, too.
The bottom line is that both partners should be open to sharing responsibilities and equity. Any inconsistency here, including inflexibility, can hinder growth and create internal conflicts.
A poor choice of investors can also have unforeseen consequences for a startup somewhere along the road. Elon Musk’s recent attempts to end OpenAI’s ‘dictatorship’ are the brightest example. As an early investor, Musk supported the startup as an educational project, but is now clearly unhappy about the company's progress, constantly adding oil to the legal dispute fire.
How to Handle Growth Effectively:
✔️ Discuss equity distribution early; how will shares be handled as the company scales?
✔️ Be open to delegating responsibilities since growth requires trusting new team members.
✔️ Create a decision-making structure that prevents power struggles.
Are You Aligned on Investment and Financial Commitments?
Here, the point is not only attracting investors — even though you might have to do that, too. When starting a new business, very few partners invest the same amount of money and effort — this is unrealistic. Usually, one person can put in more cash; another one — more expertise. The 50/50 ratio of the same 'currency' is hardly ever the case. So, both of you must understand (and appreciate!) the other partner's input for the business to work.
Unfortunately, many original partnerships never stand the test of time. One of Twitter’s co-founders, Noah Glass, was ousted in the early days, and many more cases just like this barely make the press. Long-standing partnerships between different brands are not safe either – just recall that Heinz used to supply ketchup to McDonald's for forty years before the CEO change in 2013.
How to Avoid Financial Conflicts:
✔️ Agree on financial commitments upfront; how much will each partner contribute?
✔️ If one partner is investing money and the other time, establish clear ownership stakes.
✔️ Discuss potential fundraising and investor involvement in advance.
Are You Prepared to Handle Legal and Administrative Matters?
Finally, there is paperwork. You will be signing some contracts, most of which are tough to terminate if something goes wrong. Once again, we can recall the early Twitter days or the unpleasant example of Snapchat, with its ambiguous legal wording and difficulties 'offboarding' one of the original co-founders, Reggie Brown. Or, take Facebook's early days. Eduardo Saverin co-founded the company but was later pushed out due to conflicts over business direction. Clear agreements from the start could have prevented this legal battle.
So, do not forget to consult a lawyer (pick a good one, too) before signing anything. After all, you don't want to drag an unsuccessful partnership along simply because there is no cheap way out of your contract. Try to predict every possible outcome, and do not discard any, even the tiniest, the most improbable, bumps in the road. Sure, it all seems like rainbows and unicorns in the beginning, but you still want your butt covered just in case.
Essential Legal Steps for Partnerships:
✔️ Draft a formal partnership agreement covering:
Ownership percentages
Decision-making authority
Conflict resolution processes
✔️ Outline exit strategies—what happens if one partner leaves?
✔️ Consult a lawyer before signing any agreements.
Final Thoughts: Building a Strong Business Partnership
A great partnership isn't just about shared enthusiasm—it requires trust, aligned visions, complementary skills, and clear legal agreements.
Before committing, ask yourself:
✅ Do we have compatible work styles and ethics?
✅ Are our long-term goals aligned?
✅ Do we bring different but complementary skills to the table?
✅ Are we prepared for financial and legal obligations?
Choosing the right partner can accelerate success, while the wrong choice can derail your dreams. Take the time to evaluate carefully because co-founders can set your business up for long-term success.