Predicting Business Partnership Success

“The meeting of two personalities is like the meeting of two chemical substances. If there is any reaction, both are transformed.” Carl Jung

 There is a lot to do when you form a new business, which is one reason that many people choose to team up with a business partner. While being in a partnership can solve a lot of problems, it too often creates other, more vexing ones. The inability of partners to work well together over the long-term is the chief cause of failure in business partnerships.   And,

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TAGS: Partnerships, Co-founders

Partnership Equity Splits and “Fairness”

“Measure what is measurable and make measurable what is not so.” – Galileo

For new partners, either starting a new venture or merging their businesses, few conversations are as difficult as discussing what the equity split will be. So, like any potentially messy conversation, it is often avoided. The default is to go with an even split or a split that ensures control to a specific founder.

When we see partners in serious trouble, with businesses that are in jeopardy because they can no longer work together, it is often because there is a sense of unfairness about contribution, compensation or control. Often this can be traced to

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TAGS: Facilitation, Merging, Co-founders

It's Complicated: Men, Women and Business Partnerships

It is the long history of humankind that those who learned to collaborate and improvise most effectively have prevailed. —Charles Darwin

Effective collaboration is at the core of successful business partnerships, but it is a balancing act. Collaboration can result in better products and services but can also be time-consuming and negatively affect profitability. We recently completed a survey of over 130 business partners, looking for trends in how they collaborate to create satisfying, and profitable,

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TAGS: Partnerships, Co-founders

What You Need to Know About Your Co-Founder

“All happy families are alike; each unhappy family is unhappy in its own way.” - Leo Tolstoy, Anna Karenina

Whether or not he was correct about families, Tolstoy’s philosophy does not seem to hold true for business startups. In fact, the opposite is true: startups can succeed for a variety of reasons, but most fail for the same reason: poor relationships among co-founders. Studies suggest that the majority (62%) of failure in start-ups is attributable to irresolvable conflict among co-founders. This is unfortunate not only because some great business ideas never come to fruition, but also because it is preventable.

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TAGS: Facilitation, Coaching, Merging, Co-founders

Are You Hewlett and Packard? What You Can Learn About Your Partnership From Our New Compatibility Report


“The single biggest problem with communication is the illusion that it has taken place.” George Bernard Shaw

 Assessing the behaviors and motivators of our clients and creating an overlay of the styles of all the partners in the business has always been a part of our practice.  We now have a new report that provides even more integration of the comparison of two business partners. It addresses three main areas:

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TAGS: Partnerships, Facilitation, Co-founders

Assessing Your Partnership Fit

If you are considering a merger or acquisition, or hiring with an eye toward an internal succession plan, your fit as partners will matter more than any other factor when it comes to the success of your practice.  In fact, San-Francisco-based Funders and Founders estimates that 62% of merger failure is due to partnership conflict. 

“Fit” can take into account lots of elements of compatibility; we’ll use it here to mean skills, behaviors and motivations.  Most are looking for someone with complementary skills; someone with strengths in areas where they feel less capable.  Ideally,

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TAGS: Merging, Co-founders

Learning From Partnership Failures

"The only real mistake is the one from which we learn nothing." - Henry Ford

We all hope to learn from our mistakes, so we found it a little surprising when our recent survey of about 150 business partners revealed a troubling trend. Only 38% of those who had been in a previous partnership that “ended badly” report having worked with their current partner prior to joining forces. This is slightly lower than for those in first partnerships.

Working together before taking the leap into a partnership is one of the most important steps that prospective partners can take. Here is a reminder of the top three things that potential partners should do to prevent being part of the grim 70% failure rate for business partnerships:

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TAGS: Partnerships, Coaching, Co-founders

In Order to Form a More Perfect Union: Why Your Partnership Needs a “Constitution”

"It will be of little avail if the laws be so voluminous that they cannot be read or so incoherent that they cannot be understood." - James Madison

What is a “Partnership Constitution”?

One of the advisors we interviewed for our white paper commented that he realized post-merger that a lot of discussions he had had with his potential partner during their transition period had not been captured in writing: big ideas, small ideas, as well as the vision of what the firm’s culture would be.  A lot of  important decisions were addressed in the firm’s Operating Agreement, of course.  But some of the ideas that emerged during their lengthy pre-merger discussions went undocumented.

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TAGS: Partnerships, Facilitation, Co-founders

Are You Facing A Founder's Dilemma?

In his landmark 2008 Harvard Business Review article, and subsequent book, “The Founder’s Dilemmas,” Noam Wasserman posed a thought-provoking question for business founders: Do you want to be rich or do you want to be king?”

Wasserman was mostly addressing startup CEOs about the tradeoffs inherent in taking outside money, or trading equity for needed skills.  But it is a question that can be posed to founders of professional practices who are faced with challenges in reaching the next phase for their firm. The need to stay competitive, or just to reach their full vision, often means bringing in others with needed skills or merging to gain economies of scale. Getting this talent or scale often comes at the cost of giving up sole control.

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TAGS: Merging, Co-founders

Partnership Lessons from "Shark Tank"


For budding entrepreneurs, “Shark Tank” is a pop culture phenomenon that made venture capital more accessible to the masses. Yes, there is some reality-show forced drama, but anything that gives audiences at least a passing understanding of valuations, equity stakes and market placement can’t be all bad.

There are also clear lessons in the value of partnerships to be learned from the interactions of the entrepreneurs and investors during the pitch process.  It turns out that the “sharks” invest more often in business who come in to pitch as a partnership.  Analysis of the deals show that co-founders (two or more) were far more likely to close a deal than solo entrepreneurs (44% of solo entrepreneurs close a deal vs. 58% with two co-founders.)

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TAGS: Partnerships, Co-founders


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