I once had a seasoned VC board member tell me that the nastiest divorce is often cleaner than most partner breakups.

Startups with more than one founder are more likely to succeed than those with only one founder: double the mind share, double the work done, double the domain experience and the ability to bounce ideas off of each other are benefits that are hard to argue with. If having a partner is such a good thing, then why do they often go bad?

Over the years, I’ve had some successes and some failures in situations with multiple founders. Here are a few things that I’ve learned over the years that may help you avoid the mistakes that I made early on:

Pick a partner that is in the same financial stage of life as you – if one of you has already made your money and is not dependent on a monthly paycheck while the other is, there will be a steady stream of natural conflicts. For example, if you are the typical entrepreneur you probably haven’t been paid in 6-12 months and the first term sheet represents a long overdue paycheck. Your financially secure partner might be looking to wait for a second or third term sheet in order to work a better deal over the next 3-6 months. The same type of issues will affect decisions about how much to pay each other, how quickly to grow the company, when to sell the company, etc. Personal financial stress often bleeds over into the startup environment. Avoid it if you can. If you can’t avoid it, at least make sure that the partners all have roughly the same financial runway.

Decide who is in charge – most often startup partners come out of the same company with a long working relationship. If you were peers in the past it will be more difficult to decide who is going to take which role in the newly formed company. You don’t want to show up at your first VC meeting and flip a coin to decide who is going to be the CEO for that day. Defining roles in a startup can be a tense moment but better to get clarity early and start working within those roles. This will help move the company forward quicker than “wondering” for weeks or even months. Someone needs to be in charge, even if you expect a more experienced CEO to come in with the first round of VC. You need to decide who will run the ship until then.

Be smart about equity split – You should probably talk to an attorney or experienced business person about this topic. You may be tempted to simply pick what seems like a “fair split” up front (perhaps 50/50). On the other hand, if both parties own 50% from day one and one quits after a year while the other dedicates the next 10 years of his life to make things work, the split doesn’t seem “fair” anymore. What happens if the parties completely disagree on an important issue facing the company (a 50/50 split means gridlock)? An attorney or experienced businessperson can help you think about how decisions get made when there are disagreements, how the stock ownership might shift if someone leaves the company, etc.

I’ve seen too many cases where startup companies imploded when founders who had worked together for years were suddenly dropped into these situations and were unable to come out the other side with a working relationship thus killing a good opportunity (and a friendship). Having these conversations before you each quit your day job will either increase the probability of your startup being successful or, at a minimum, allow you to keep your day job until you find the right partner.

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