Partnerships That Matter
tl;dr
Co-Founders Set the Foundation: The right co-founder can make or break a startup. Protect yourself legally, choose partners who complement your skills, and remember that diverse teams attract more funding.
Investors Are Long-Term Partners: Taking money from the wrong investor can be costly. Look beyond the check—make sure their values and working style align with yours.
Strong Partnerships Drive Growth: Strategic alliances can open doors to new markets, enhance your offerings, and accelerate success. Invest time in finding the right fit and nurturing these relationships.
This month we’re inspired to talk about partnerships that matter.
Now, not everyone celebrates Valentine’s Day, either because they aren’t currently partnered or perhaps because they “don’t need a card company to remind them to love their partner” (quote courtesy a close friend who very much loves their partner on the daily).
In business, however, partnerships of all types are incredibly important, so let’s review the most important and why they can make or break an organization.
Co-Founders
Get ready, there’s a lot to unpack here.
You don’t always get to choose your co-founders, because sometimes ideation happens amongst a group of people who then decide to work together on the concept. In this situation, your best move is to make sure you do your due diligence on your paperwork and internal security processes to ensure that the co-founder relationship doesn’t go south. Why?
Well, there are more than a few stories out there of individuals going rogue, locking their co-founders out of code, bank accounts or more, triggering costly litigation and potentially wasting time or key launch dates as they sort it out.
In some cases, the ideation phase may have been the work of a single individual. In that case, you may wish to consider bringing in some early “employees” by offering them co-founder status. You’ll want to consider these people carefully, as you’ll want to fill key roles - one example is a CFO who can assist with fundraising - and choose wisely.
By way of warning, remember that Elon Musk was NOT actually the founder of Tesla, but an early investor. The company was founded and the initial car designed by Marc Tarpenning and Martin Eberhard.
However, it bears reminding that investors frequently avoid investing in solopreneurs, so adding a co-founder may increase your chances of investment. And for women founders specifically, you may wish to strategically add a male co-founder, since we have the data that conclusively shows that women-founded companies get a decreasing amount of angel and venture capital, whereas companies that have a woman and a male as founders see a much larger amount of funding.
Pitchbook recently released their most recent US stats, showing the difference a diverse founding team can make for women entrepreneurs. Many women go to the US for funding, so it bears a look: 1.8% goes to all-female founding teams, but add men and suddenly the funding jumps to 21.7%.
A final co-founder consideration: remember that should you be so lucky as to be the one in ten startups that succeeds and achieves the elusive Exit, remember that founders are the last to be paid per the exit waterfall, and you’ll have to share that payout with your co-founding team.
Investors
If you’re on the early end of pitching, what I’m about to say might feel uncomfortable, but: make sure you ONLY take on investors you’re comfortable working with. Yes, I know you need money to keep your business going, but to quote Catherine Chan (COO at the Canadian Women’s Chamber of Commerce), “There’s always a price to be paid.”
We asked her to elaborate: “You need to be comfortable with what you give up, and what you have to do for the money you’re getting; weigh those factors carefully when you make those decisions. We’ve all worked with folks we’d prefer we didn’t have to, for whatever reason. Some of your key investors are going to be in your life in a big way, and potentially for a long time.”
“Don’t set yourself up for failure by accepting whatever money comes your way quickly. Determine if the person has the same values and goals as you and if they work in a similar way to you. Vett them like you would a co-founder. This is the best way to avoid investor drama that takes up all your time instead of allowing you to focus on moving your business forward.”
This is where your networking skills come into play, and take the time to do the discovery and followup calls. Spend the time to get to know a potential key investor, but also trust your gut and be confident in the decision you make, whether it’s to move on or move forward.
Strategic Partners
The right strategic partnership has the opportunity to super-charge your company’s growth. That might be because it introduces your business to a whole new market or client base, or it might be because the partnership fills a gap in your product or service.
Treat your partners well, because a rising tide CAN lift all ships. Outcomes are important; dedicate enough resources to program delivery and stay focused on successfully achieving the partnership goals you agreed upon in the contract building phase.
We asked Maryam Masoumi about her work on Strategic Partnerships at CanWCC: “We have Trusted Partners, who we vett carefully to ensure they’re aligned with ours and our members’ values.”
“We also work closely with many other ecosystem partners to support our members, program delivery and policy work because collaboration, community and collective impact is an important aspect of the work we do, so we have chosen to live our ‘advocacy’ through our business and partnership practices.”
Women’s Intuition
If you’re interested in meeting women in business -perhaps in search of a strategic partnership or cofounder- join organizations like Connection Silicon Valley or the Canadian Women’s Chamber of Commerce. These may also be helpful in connecting you with women investors or investors whose thesis includes funding ‘diverse’ founder groups.
Either way, remember: women are keen collaborators and make great business partners, thanks to generally high EQ. It also bears reiterating what was written above: trust your gut. Tap into that intuition that you use to guide your decision making and let it also guide your business relationships. And good luck!
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