Marc Andreessen once said: “Do you know the best thing about starting a company? You only ever experience two emotions: : euphoria and terror. And I find that lack of sleep enhances them both".

Andreessen’s on the money. Starting your own company is alternately scary as hell and exhilarating- it’s all part of the process of growing as an individual. Which is why most people don't start companies on their own.

I remember when I started my first ' real' business at 18, sitting in an empty room with one chair, no table, an IBM 286 PC and 52 copies of the Yellow Pages that were to act as my customer target market for the next 3 years. There was just enough money in the bank to pay a month’s rent on the office room as long as I skipped eating . My co-founder lost even more weight than I did.

It’s the uncertainty that causes the anxiety- uncertainty of winning that critical sale, uncertainty of whether you have the right team, the right product, the right pitch, the right plan. And that uncertainty leads to anxiety which means that the highs are incredibly high- but the lows, well it takes a lot to come through them.

That constant yo- yo of emotions has to balanced somewhere along the line, and that's where a co-founder or a business partner can come into their own.

But a word of caution here. There's a lot of emphasis in any business of having the right team in place, and you'll often hear about so called 'dream teams' of partners who have gone on to build great companies, but these are rare.

If you think back on the world’s great Entrepreneurs, rewind from Zuckerberg today to Jobs, Gates, Ellison and Branson to name a few, you would struggle to remember who their business partners were.

But they did have them.

Facebook was founded with Zuckerberg and Eduardo Saverin, Dustin Moskovitz and Chris Hughes. Microsoft was founded by Gates and Paul Allen. Apple was created by Steve Jobs, Steve Wozniak, and Ronald Wayne. Ellison built Oracle with Bob Miner and Ed Oates.

And yet most people have never heard of the co-founders. It’s the 'co-founder' myth that most people somehow think being co-founders makes you equal partners.

It shouldn't and it doesn't.

After all just because you are co-founders doesn't make you equal in drive, intellect, skill, or application.

It stands to reason therefore that it also shouldn't make you equal in terms of your shareholding. And when as is all too often shareholdings get constructed 50: 50, is when the problems can start.

I've funded a number of co-founders and after a while you can end up feeling like a RELATE counsellor- so here's some ideas that may help keep the founders together as a team when things get challenging later on.

• In your start up days 50: 50 feels fair, after all you are both supposedly taking equal risk so equal rewards seem to be right.
• Of course what it doesn't do is enable one of you to be the leader. For example if you are the CEO and your partner is the CEO then you end up with the main responsibility and accountability of the running of the company. So it’s you who ends up with the bigger risk, yet you are equal shareholders. Go figure.
• Like a marriage unless you have been through a very long period of engagement together , its pretty hard to see just how your partner is going to be months or years down the line. And going to college together doesn't count [ see the movie the Social Network if you want to see why]
• A 50: 50 partnership can be very bad news later on . Especially when you both want to go in different directions, or sell, or acquire. Disagreements can lead to resentment because a 50; 50 deadlock means there is no exit route for either of you. Being commercially manacled together does not make for a harmonious partnership.
• Equal partnerships may provide you with a sense of comfort when you are setting out, the 'we're in it together' makes it easier- but only in the short term.

Face it - Entrepreneurs are a minority species still . I posted a while back about how most people would really rather work for someone else, let somebody else worry, take the risks, the responsibility. After all most people simply want to get paid for doing a job.

You have to know your co-founder very well indeed to make the judgement call of whether they are an Entrepreneur or would be more geared to being a part of your team.

Here's the thing. You can have a team of co-founders . You can divide up the equity between them. 50% is a lot, % or 10 % is better. They are still very much a part of the business culture and direction, but your expectancy of them is narrowed down to the specific skills they offer, rather than being burdened as an equal partner.

When it’s all going well being equal business partners is easy. Unfortunately business has a habit of going great guns only a tiny fraction of the time, most of the rest is pain.

In business it’s okay to have the equivalent of a 'pre- nup' with your business partner- it is after all nothing personal, just business.

Tags: Entrepreneur

This thread has been closed from taking new comments.