Nonetheless—I want to very thorough and make sure we get to know each other much more.
What questions should we be asking each other? What topics should we be broaching? How do we get to deeply know each other in as short of a time as possible?
The best way to learn this is by hearing about what y'all did or wish you did.
I have some ideas. First of all:
* Would you like to be a cofounder or just a service provider?
If yes, then I would ask Jason Lemkin's two questions:
* Are you willing to do this for the next 7–10 years? * And are you willing to go for 24 months until we have any real traction at all?
Then I think Mark Zuckerberg spending MONTHS vetting Sheryl Sandberg. He particularly wanted someone who wasn't afraid of people better than them. Possible question
* Who is better than you? Would you recruit them?
More ideas:
* What is your learning style? * Are you doing it for the likes, the mission, or the money? How do you rank these? * How would you manage a team? What would your weekly meeting structure look like?
Would love to get even more ideas from y'all! Thanks!
I'm not kidding, and this is a real issue. A lot of people who can be great entrepreneurs can also have detrimental effects on your culture, the trust of your clients, and your long-term sustainability. Drive, initiative, passion, aptitude - these are qualities present in great founders and appear to be present in workplace psychopaths.
Get to know this person, and get a strong sense of their values - not from what they say and want you to believe, but from taking in the context of their accounts of what has worked out, and what is not, in their personal and professional life. For people they speak dismissively or negatively of, find them and get their side of the story. You cannot do too much due diligence here - this is critical, especially if you start to become widely successful. Then you're locked in with your partner in the co-pilot seat, and you won't have the desire to bolt or ability to change your decision without significant if not disastrous consequences to your business.
Your values must align, and you must trust this person with your life. Your startup will be your life for the next 7-10 years, by your planning.
Watch out for people only living for themselves, not caring whatever they say as long as they get their way, trying to manipulate people intentionally. Look out for the ones that have no skill other than extortion, putting pressure. That always put work on others so they can never take blame. People who never apologize, and never admit they're wrong.
Those are the ones you'll want to avoid. Also always trust your gut.
Meanwhile he'll be playing the long con with you - manipulation and mind games that can be incredibly subtle. I had the misfortune of working with one of those for a few months - we almost became co-founders. Recognizing and getting out of that situation before I got in any deeper was one of the smartest moves I've ever made.
http://www.businessinsider.com/charles-schwab-ceo-takes-job-...
If you have the means, take a trip half-way across the world and live in close quarters for 3 weeks together (while you work to get the business off the ground). If you can't stand them by the end of the trip; walk away.
I've been working with my cofounder for 15 years now and together we've accrued more than ~$30M in combined revenue from a handful of projects. Being able to argue, disagree, make a decision, move on and then grab a beer after work like nothing happened is paramount. Your personal relationship with this person will be the first domino in every decision you make.
As for determining if she is the right person professionally, I'd make a list of all of the things that...
1. You suck at
2. You hate doing
...that will be necessary to succeed. In a perfect world, she will excel at many/all of these things and love doing them - allowing you to divide the workload and each focus on your strengths. Don't take her word for it - find out, test her, check references, do whatever you have to do to be comfortable that she is the right person.
I have a friend who helped start someone selling a breakfast product. The plan was my friend would invest $20k and the partner would run it as a local business, and they'd split 50-50. Very quickly my friend got excited by the potential and started working full time to help, ends up investing hundreds of thousands of dollars, doing all e-commerce, marketing, negotiations, paying for industrial quality kitchen, etc, while the partner just mixed and packaged. Sales shot up and the company begins to have significant value, but still requires more investment.
They needed to switch from an LLC to a C corp so they could get funding and start giving stock options to attract/keep good employees. The partner conceded that my friend was doing the lions share of the work and had put a ton of money in while he had put in nothing, and that my friend should have most of the initial stock in the C corp. But they struggled to agree on an exact split.
So then the partner talks to friends and family who of course tell him "it was YOUR IDEA, you shouldn't have to give up anything!" and comes back refusing to sign anything (which scotches the C corp conversion). Eventually he's able to force my friend to buy him out for a totally unreasonable price.
So my specific advice is.
1) Never start a new venture as an LLC unless you don't plan to ever share equity with employees AND you expect it to be a cash flow business that will pay out all profits directly to partners.
2) Always force all partners to vest their equity over years. You can do incentive stock options, or restrict stock units, or however you want. If you can't afford a lawyer to draw it up yet, at least put the arrangement in writing and agree to it, so that if you have disagreements and need to part ways, you aren't being forced to buy half the business from some guy who mixed ingredients for 6 months.
Tech Investors hate LLCs cause they hate K1 forms.
"If either one of us loses interest and wants to move on, how can we handle the situation?"
I actually just want to walk away, my point was more about how can I politely tell you that I don't want to do this anymore? Not so much the legal ramifications of who owns what.
Questions: * Do they have any loans that need to be payed? If yes, how would this affect future decisions to stay in the company? * Are they thinking about wanting to do something they haven't been able to do before (traveling for long, living abroad)? * How much do they need the stability of a regular job?
* When faced with a difficult decision and incomplete information, how do you decide what course of action to take? Can you talk through a real life example of a situation like this?
* Let's assume we decide to be co-founders and start this company together. What kinds of things would cause you to want/need to leave the company you helped start? Are there milestones, financial or otherwise, that the company needs to hit in order for you to keep working on it for the long term?
* When it's just the two of us working on the company, how would you like to divide responsibilities between the two of us? If we succeed in growing the company beyond just the two of us, what do you want your role in the company to be?
I worked with a person with the plan to raise money later. It turned out he didn't run his current business well and soon wasn't able to pay for rent, had to sell his car, stopped paying the rent for the office we were sitting in. Looking back it explained a couple of questionable decisions (e.g. claims to debtors, very much over-promising, aggressive release plans, side-projects to make extra money). I'm not saying you have to be well off before going into a months/years long project but living paycheck to paycheck isn't a glorious "[he|she] is hungry and eager to make this a success" but plain stupid.
Mix into this the shiny toy syndrome that co-founders can fall prey to over time, and it really becomes about dating before getting married.
Every partnership is about creating value through leveraging an opportunity together, not leveraging against each other.
If the partner's value is adding sales, their equity should be tied to vesting as a percentage of the lasting sales that stay in.
If they are creating value through code, it should be seen the same way.
I also very much value hacking on small problems in the desired space to get an idea if people can work together and ship regularly before going steady and getting married.
My team had a specific conversation about that when we started the company. We even picked "a number". 4 years later, we got an offer for that number, and one founder was hesitant to take it. We all pointed back to that conversation when making the decision to sell. Had we not had that conversation, it would have been real fight internally.
Ask yourself a few questions first. Does your cofounder have a track record of execution or do they bounce from scheme to scheme without achieving anything? Are they sane and competent or do they have a criminal history and a troubling social media presence?
Do your due diligence. Run a background check (seriously). Don't be afraid to ask the hard and uncomfortable questions up front.
In my own experience, if I were to bring on a cofounder again I would write a honeymoon period clause into the Founders' Agreement. Something to the effect that if the relationship doesn't work out during an initial period of time, each party's risk is limited to only the money and time they put into it. I'd rather get an annulment than a divorce if possible.
Also like that e-myth book, make sure whatever roles you're going to be taking, it is in writing and there is no confusion about who is doing what. This is especially important when the day comes and you have to take a big decision about your company and she sees differently than you.
You will say to yourself that "little things" can easily be overcome, but people rarely change. People make most choices by their external circumstances and influences, even when they truly want things to be different.
Otherwise, there aren't enough interview questions in the world to tell you the important stuff.
http://web.archive.org/web/20160220013218/http://founderdati...
