Working with a co-founder? Do this

It doesn’t matter if you’re going into business with your best friend or your cousin; do this

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A friend once co-founded a business with someone he had known for over 15 years. They had built things together in school, hustled side by side, and even loaned each other money in tough times. So, when they started a company, they didn’t think they needed to write anything down. After all, they trusted each other. The plan was simple—50/50 ownership, joint decision-making, and equal effort.

But when the business started making serious money, the cracks appeared. One person was putting in 80% of the work, while the other was barely involved. When they got their first major client, one assumed profits would be split equally, while the other believed it should be based on contribution. They argued. The resentment grew. The partnership fell apart. And because nothing was written down, there was no legal structure to guide the breakup. They lost everything.

This is what happens when founders operate on vibes instead of structure. It doesn’t matter if you’re going into business with your best friend, your cousin, or someone you deeply trust—document everything. Trust doesn’t prevent misunderstandings. Money, power, and stress change dynamics. If you don’t set clear agreements from the start, you’re setting yourself up for disaster.

One of the biggest sources of conflict in partnerships is equity. I know someone who built a startup with a technical co-founder. One person handled the business side—bringing in deals, setting up operations, and handling clients—while the other focused purely on tech. They assumed they were equal partners, but as the company grew, one person was working 16-hour days while the other showed up whenever they felt like it. The resentment built up. One wanted to renegotiate equity, but the other refused. Because nothing was in writing, it became a messy battle.

Ownership isn’t something you figure out later. If one person is bringing capital while the other is bringing sweat equity, there must be clear terms on how much each contribution is worth. If someone is expected to do more work, how will that be reflected in ownership? If one person leaves, what happens to their shares? These conversations are uncomfortable, but they are necessary.

Roles and responsibilities must also be clearly defined. I once saw a partnership collapse because two co-founders never agreed on who had the final say on big decisions. One assumed all financial decisions were joint, while the other believed that as CEO, they had ultimate authority. It wasn’t an issue when they were small, but when investors came in, they fought over who had control. By the time they figured it out, the damage was done.

No matter how strong your relationship is, discuss what happens if one person wants to leave. Will they be able to sell their shares to anyone? Does the remaining co-founder get the first right to buy them out? If this isn’t settled early, when emotions are involved, things get messy fast.

Partnerships don’t fail because people are bad. They fail because people don’t prepare. Don’t let your business become a statistic. Write everything down.

"If shaky partnerships sink businesses, unpredictable cash flow drowns them.

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