Blog Post

5 Tips For Vetting a Business Partner — Online

aruni-headshot-sep07-200x150Finding the right business partner is probably the most important business decision you can make. Do it wrong and life is miserable. Do it right and the whole is greater than the sum of its parts. In my first technology startup, I found a great partner while getting my MBA. He handled the technology, and I handled the business (fundraising, hiring, board and investor management, etc.). It worked out well — so well that we ended up getting married and now have two kids (human ventures)! We’re 7 years into marriage, so we’ll see how that turns out.

I’ve been going at it mostly alone in my current business, Babble Soft, with sideline help from my husband. And, although I’d made progress, it was tough and tiring. I didn’t have someone I could bounce around ideas with. I needed a partner. I found my first business partner in business school, so how would I find a partner working from my home office? How could I find someone who shared the same vision I did: to help new parents navigate the world of parenting in a digital age? I ended up finding her — where else? — online.

Once upon a time, I met Connie Reece, Austin’s social-media maven. She set me up with my first blog and began introducing me to people, including Wendy Piersall, who runs Sparkplugging. Wendy and I got along famously, and she invited me to join a Blog Mastermind group of extremely talented folks like Char Polanosky, Jill Koenig, Edward Mills, Easton Ellsworth, Dawud Miracle, and David Bullock. After one of our calls, Edward sent out links to articles he wrote on Sparkplugging about the experiences of a company called Pick Nick’s Brain, a baby sleep consulting site run by a woman named Nicole Johnson.

After reading his posts, I reached out to Nicole, and we started a dialogue. PickNick’s Brain was a perfect complement to our baby sleep offerings; she has two little boys; and, more importantly, she had the drive and passion to make a difference in the world of parenting. I’ve never hired an employee sight unseen, let alone a full-fledged partner. But a Skype video call (so we could make eye contact), several voice calls, tweets and emails later, it was official. She took a leap of faith and joined me, and I can already feel the difference in productivity and energy.

Nicole is smarter than me in technology development — my head had hurt daily trying to manage it. She received her undergraduate Computer Science degree from UC Berkeley and her MBA from Ohio State. I now have someone I trust handling the technology, so I can do the things I’m much better at doing and like to do. I’m anticipating that this partnership will work out just as great as my first business partnership — without the marriage part!

Since picking a virtual partner sight unseen can be a daunting task, here are some things I’ve learned about evaluating a potential partner:

  1. They must be smarter than you are in their respective area of expertise. Heck, they can even be just plain smarter than you and increase your perceived braininess! Michael Dell hired smart people, and the people that Bill Gates brought on were pretty darn smart, too.
  2. They must communicate well. Observe their communication and conflict resolution style. The last thing you want is to beg someone to communicate with you when things don’t go as planned. If they don’t live in the same city, you can’t show up on their front door!
  3. Spend time getting to know them. Watch them and see how they behave online and with other people. If you watch someone online (e.g., read their blog, tweets, comments) for a couple of months, you can make a reasonable assessment of their personality and reputation.
  4. Check each others’ references. You don’t want something to surprise either one of you. References usually say great things, but knowing what questions to ask and what to listen for gives you 80 percent of the information you need.
  5. Take care of necessary paperwork. Getting a lawyer involved is a necessary evil. Agreements should be in place to protect both of you. If you assessed item No. 2 above correctly, then agreements can always be amicably adjusted to reflect new information.

Bringing on a virtual partner can be a daunting task. You are taking a risk by giving up part of your company to someone you have never met. But taking the chance to bring on the right partner can make all the difference in the world!

Aruni Gunasegaram is a serial entrepreneur and Founder/CEO of Babble Soft. She blogs at entrepreMusings. She has two kids and runs Operations for the Austin Technology Incubator during the day. You can follow her on Twitter @aruni.

23 Responses to “5 Tips For Vetting a Business Partner — Online”

  1. @Allan – Good partners are hard to find and you have to take calculated risks. So far so good on my calculate risk!

    @James – It is tough to find out about someone’s personal financial situation, but I think there are certain questions you can ask that can give you indications of their financial health.

    I hope everyone had a great Thanksgiving!

  2. @Neil – I do remember changing some emails on Firefox web app issues a while ago with you! Congrats on launching your new web app (saw it on your blog) and for your pending partnership with a developer friend. It is nice to have someone to talk with about things!

    @Edward – Thanks for being the catalyst that connected me to Nicole. Law of Attraction at work. :-)

  3. Hi Aruni. So glad that it worked out with you and Nicole. And what great tips here for anyone looking to get into a business partnership. As small business owners it can be tempting to jump into a relationship on a gut feeling and a handshake. Thanks for reminding us of the importance of doing the legwork in the beginning to make sure the relationship will be a long-term success!

  4. Aruni, I remember one of your posts on the original Found+Read (yonks ago) and I’m sure we exchanged a couple of emails on some browser bug issues – glad to see things are going well with Babblesoft; the application screen shots on the homepage look great.

    Re. co-founders/business partners: Congratulations on finding someone to help bear the weight of running a business, I bet it’s already making a big difference. I’ve managed to push out a private beta application as a lone founder, and it’s tough. Sounds like you have a good match there.

    In the last few days, a Rails developer friend and I have decided to collaborate on a business idea over a weekend (it’s a small project, lots of potential). We originally got in touch over the Web through Rails programming sites, we’ve met once for some coding & coffee (but we catch up every day on Twitter/Skype/the-private-beta-of-my-app, luckily enough), and we’ve finally found a project which feels like a good match for our skill sets. Plus in the interim we’ve had the time to share code, work through bug fixes on each others projects, use collaborative programming tools, etc, and the Web applications we use everyday have helped us to do the ‘vetting’. Although, it’s never felt like we’ve been doing that – it’s more a matter of keeping in touch and finding out what people are up to on a daily basis (as you’ve stated in your third bullet point).

  5. @penguinsix – I totally agree that they should work just as hard as you. If someone isn’t working as hard as you, then it’s a very unbalanced partnership.

    @Joe – I never thought I’d find a business partner online either until I met Nicole. We both seem to have similar goals. You are so right about making sure everything is lined up if you hire them online or in person!

    @Martin – I’m not sure what your free tool is, but it is important to do the vetting. You can also do all the vetting in the world but until you work with them, you won’t ever know the full story. Listening to references is important and having legal documents in place if the person becomes a big problem is very important.

  6. I would strongly recommend vetting them in social media using a free tool like ours. I had a past experience (not with my current company) where a partner who appeared to fit all your criteria turned out to be a big problem, a problem I would have discovered had I done the vetting. A bad partner can be extremely expensive in many ways…

  7. Your five points are on the mark, but I can’t imagine finding a business partner online. My business partner and I knew each other for 10 years while we worked at major media companies and start-ups owned by other people. She’s smarter and more organized than me when it comes to sales and business engagements. I’m generally stronger in such areas as content development and audience development.

    But NONE of that matters without (1) clear communications (2) similar career and family goals and (3) similar work ethics. Notice that I mentioned family. We’re both married (not to each other… Ha!) and we each have kids. So we’re respectful of the need to balance work and family, even as we work crazy hours to build our business.

    I highly recommend starting a business with a partner. I can’t imagine doing this solo. But you really do need to sit down with lawyers, accountants and your own spouses to ask the hard questions about how the business will be set up, organized, managed, etc.

  8. I would add ‘they must work as hard as you’. Not necessarily the same number of hours, but they must be as committed and dedicated to the tasks at hand as you are. If you are pulling late nights and they are out at a wine and cheese party, then resentment will easily creep in no matter how well you get along with them.