6) Passion and Life/Work Imbalance
This is part of the overall company culture and is a very important point to consider when forming a founding team. It is monumentally important that the founding team is on the same page when it comes to commitment level both in terms of daily and long-term involvement and sheer effort. Ideally, everyone would put 110% into the business. Too often there are people who put in a 30% effort while working other gigs on the side or simply by not working hard enough. Over time, large differences in commitment and effort between the partners can create discord and feelings of being taken advantage of. Expectations have to be laid out and discussed before creating the
7) Partnership Agreements
It is a far too common an occurrence when founding members decide to split the company equally, sign some roughly-sketched paperwork, get started, and after a month have someone quit the project and walk away with their share of the company which may range from 20-50%. Obviously that cripples the ownership structure. If you are working with partners, you must have some knowledge of legal implications of your partnership in case someone under-performs. You also need to have laid out agreements on what happens in case of decision or voting stalemates. The same thing is true for ownership vesting schedule or intellectual property. These are just some of the very basic legal implications of working with co-founders. It is your responsibility to research the implications of your collaboration to protect yourself and the company.
8) Long-Term Goals
Many young entrepreneurs dream of hitting it big and making millions of dollars. When people stick around through a number of companies, and become serial entrepreneurs, it tends to be as much for the love of the process as it is for the money. They might not want to sell and cash out when the first opportunity presents itself. They might just want to build a company, grow it and keep it. Don't assume the people with whom you are starting the business have the same aspirations as you do. Always ask something along the lines of "what is your goal for starting this business?"
If you love starting businesses, it may seem to you that so do others. Similarly, if you want to make a lot of money, it may seem to you that others will automatically want that as well. People are very different and you should not assume that you understand where they want to take the business long-term. Always ask and make sure you are in agreement.
9) How Well Do You Know Your Partners?
Since you are embarking on a potential multi-year collaboration, it very important that you have had some sort of a working relationship with your potential partners. They may be past co-workers, friends you easily get along with, people with good industry reputations, or people who in the very least case have worked for a reputable company in the industry.
Finding the right business partners is a little bit like dating. You have to work with many people before you get a sense for what type of partner is right for you. You can't just jump into a venture with people you barely know who you hope will work out. If you do, you are likely to find yourself in a relationship which isn't right for you.
This ties in to the point of a currently popular way to find co-founders in local entrepreneur events or meetups. While the meetups truly are a great resource, be careful about jumping into a long-term partnership with someone you just met. You are introducing a large risk by becoming
partners with people you recently met and have not worked with. You will only find out how compatible your collaboration truly is, only during the collaboration. If it does not work out, it may add negativity or cripple the culture and stability of the project.
10) Are Your Partners A, B or C Players?
The old saying goes that if you work A-level people, you will make A-level products. If you work with B-level people, you will make C-level products. And if you work with C-level people, you will make failing products. Don't settle for people close to you, or who happen to possess a particular skill set. Look at the bigger picture. The team member is only an A-player if he satisfies just about all the above criteria. Having a certain skill is only a minimum requirement. On top of that, the person must be a hard worker, fit into the team culture you aim to foster, excel at their craft, and share your long-term goals and commitment level.