1. Whether or not you like working with them all day 2. Whether or not you can resolve disputes in a friendly, dispassionate manner 3. Whether or not they can be trusted to act in your best interest most of the time, aka not stab you in the back at the first opportunity 4. Their work ethic.
The benefit of working with your best friend is that you know a priori whether they satisfy most of these constraints (nota bene: your best friend may not be all that great of a business partner).
I don't really understand how people can team up with perfect strangers they can't vet; I imagine there are a lot of tense, meaningless conversations early on regarding equity and division of labour precisely because they can't trust each other implicitly. When incorporating our company, we skipped a lot of awkward conversations with the understanding that we'd talk them through like adults should conflicts arise. There are very few people in my life I can do that with.
The key thing to keep in mind is that you have to talk about your exit from day one. Your business is likely to fail, and so you always have to keep in mind how to gracefully handle it to preserve your relationship. Suppose you toil for a year or two and things are kind of stagnant but you or your buddy get offered a sweet job, man. You can turn on the guilt but you should also be able to step back and say "yeah this is probably the right move for you, go for it".
I've worked with a good friend where things soured (and it was like 60% my fault); it was awkward for a month or two afterwards but not unlike an ex girlfriend we had a good chat about it over beers once things had settled down and moved on and recovered entirely.
It's a delicate exercise, but one that for me at least has worked out pretty good so far.
You wrote "I don't really understand how people can team up with perfect strangers they can't vet;" and that is a very strong reason why i want to team up with him. Because since we are starting something from ground 0, building connections, working like maniacs etc, i think i would like to rely on someone that i know for years, that i can trust and expect to behave in certain situations like i would.
That said, i think that will be very important for us to make something like a vow stating that we both are open to choose "bailout" as long the other part knows it in advance. Always communicate our beliefs and disagreements. And more important always act in the best interess of the startup.
Does that cover it?
Ditto re: "communicate beliefs and disagreements". That's an extremely hard task because a lot of the time they'll reside in the emotional plane and be hard to articulate. I'd focus more on "can we resolve arguments without hating each other?"
But yeah sounds like you're on the right track. Good luck.
