Choose your business partner wisely and ruthlessly, or risk losing it

Source: Entrepreneur.com

Much has been written about this, yet we repeatedly make the same mistake: choosing the wrong partner for our business venture. Today, I’ll share my own experience. A few years ago, I welcomed a financial professional from Wall Street to my team. I did so because I lacked financial expertise and needed complementary skills for my sales and marketing capabilities. While I had the right idea, my execution was poor. I was “seduced” by his Wall Street title, financial market knowledge, and ease in discussing multimillion-dollar transactions. Due to my insecurity and lack of due diligence, he bulldozed himself into the team. Unfortunately, my inability to see his “baggage” narcissism, arrogance, ego, and lack of integrity, led me to welcome a negative influence into my life. In short, by bringing him into my team, I gained financial skills but also introduced intolerable characteristics that damaged the entire team and, ultimately, the clients of my women empowerment and environmental practice.

I share my experience to guide other entrepreneurs and decision-makers facing pressure to make smart hiring or partnership decisions. Before delving into specific aspects, here are my three metrics for choosing a business partner: 1) Integrity; 2) high energy; and 3) complementary skills. The rest can be worked out if these non-negotiable elements are in place.

Now, let’s break it down:

1. What skills does the ideal candidate bring to your venture? Ask yourself what skills they bring to your life. Ensure there is no duplication, a common issue when co-founders are friends from the same engineering or MBA program. Make sure the new team member’s skills strengthen your business core without duplication, which can occur during company growth.
2. Do their values align with mine or the team’s? Ensure your values remain intact, regardless of who joins, and that their values align with yours as much as possible. Make integrity a non-negotiable part of the new team members’ DNA. Otherwise, you risk adding tension and conflict that becomes a distraction. Protect core values while encouraging diverse opinions and challenging business practices. For example, if you’re a staunch sustainability advocate, partnering with someone who believes climate change is a fraud may prove challenging.

What about investors? Don’t treat investors differently than your business partner, as you’ll work with them for the entire life of your company, unless there’s an exit or the company goes under. Many founders, especially first-time entrepreneurs, seek quick funding. Exercise caution and slow down. Aim for the “right funds” or “smart/strategic money,” which comes with positive externalities like advice, new clients, and strategy support.

Dig deeper when raising capital. Talk to everyone, start with family, friends, and those you have access to. Connect with local angel investor communities, often part of accelerators and venture builders. Reach out to Venture Capital firms, family offices, and wealthy individuals who can contribute to your project. Your goal is to secure funding from individuals you want in your life.

Remember, money from someone you don’t want is bad money; avoid it. Instead, focus on raising funds by generating revenues, eliminating the need to give away equity.

Lastly, be prepared to spend six to twelve months securing smart capital. Even if you don’t secure the money, view these efforts as network-building and partnership exercises. Some individuals may not invest but might want to join your advisory board, providing skills and seniority you lack.