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I cofounded two startups with my best friend. Here are 5 ways we made it work

It’s a rule many agree on: Doing business with friends is a bad idea. These two entrepreneurs met in college a decade ago and are proving the old adage wrong.

I cofounded two startups with my best friend. Here are 5 ways we made it work
[Source Images: Unsplash]

Has anyone ever warned you “Never go into business with a friend”? That advice might be relevant for some, but it can also prove restrictive. With the right friend and business partner, your venture can succeed—and maybe even enhance your friendship.

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In general, founding a startup from the ground up is not a simple task, but I have been fortunate to have a great friend and partner along for the ride. Not once, but twice.

My cofounder Amit Bareket and I met 10 years ago in university while studying computer science. We both had a similar dream to launch a tech startup, and we were able to turn this dream into a reality together. We founded our first company, SaferVPN, eight years ago and sold the business in 2019, after moving on to our second startup, Perimeter 81, a cloud and network security company.

Some might say that my cofounder Amit and I are like an old married couple as we have been working together day and night for almost a decade. We don’t always agree on everything—from monumental decisions such as funding rounds, to small things such as buying a plant for our office. But, in the end, we always look at the bigger picture, which helps us bridge the gaps and come to an agreement.

For example, we didn’t exactly see eye to eye when moving to a new office space. I was concerned about aesthetics and size and was prepared to inflate the budget to match, while Amit was more conservative and focused on function over form. This created a bit of friction between us, but in the end we reached a balance that worked better than either my or his idea alone.

We compromised on a medium-sized office that we could renovate and redesign ourselves, satisfying Amit’s financial foresight and my desire to give our employees a place they can truly enjoy working in. It’s crucial to provide the space and amenities for a comfortable, productive atmosphere, but it’s also smart to be budget-conscious, and instead of anticipating growth with an oversized space, fold the capital back into the startup to help ensure growth actually happens.

This was a reflection of our personalities—Amit is more analytical, and I tend to grasp the design and loom of our company. Ultimately, we realized that it is these differences that actually make us great business partners, and we were able to take what we learned during our first venture, both about business and ourselves, and apply it to our second.

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Starting a business with a friend can be challenging. Your friendship will change, the way you interact will change, and the way you run your business will change. Amit and I have had our share of ups and downs, but today I can say that both are rock solid.

If you’re thinking about starting (and running) a business with a friend, here are five tips for ensuring both your business and your friendship stay afloat:

Define Your Roles from the Start

While splitting responsibilities equally from the start may seem like the logical option, this approach will only take you so far. It is important to embrace your strengths and be aware of your weaknesses, and for both business partners to complement each other. Develop a list of your skill sets and cross-reference, so that you can cover various aspects of running a business. Most likely, you both will have complementary skills—where you are lacking, your friend can contribute, and vice versa. After you gain a clear understanding of what you can each contribute to the business, it is time to divide the responsibilities. This division of labor will help your communication moving forward, as you are both fully cognizant of what falls under your purview, eliminating gray areas and miscommunications.


Related: Married cofounders reveal their secrets for success


When Amit and I first started SaferVPN, we made a clear separation of responsibilities. I  was in charge of all of the design, product, and marketing aspects of our startup, and he took ownership of all of the infrastructure and development-related features. While we continuously bounce ideas off of each other and give each other advice and input, we both have a clear vision of our individual responsibilities, which helps the business flourish.

Always Have Honest and Open Communication

Communication is key to the success of any relationship, whether it’s a marriage, a friendship, or a business. Business partners spend more waking hours together than any other type of interpersonal relationship. The amount of time spent building and running a business together gives cofounders the opportunity to give each other advice and share insights with each other in order to make business decisions. With the shift to remote work, communication has become even more important. Founders need to discover the best ways to communicate with each other; since they are not working face-to-face, they may be missing the daily context. By setting up daily check-ins, each founder will provide goal clarity, which is missing while working remotely.

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But, no matter how often you and your business partner speak, it is important to make sure you are being fully transparent. Being open about feelings and expectations, even if you disagree, is paramount. Having honest and open communication will not only be beneficial for your business, but it will also strengthen your friendship in the long run.

Clearly Separate Personal and Business Matters

One of the toughest but most important things to do as a founder of a business is to set boundaries between personal and business matters. It does not matter how and when you decide to separate the two, but it is important to have a clear line between professional and personal issues, in the office and out.  Keep the personal discussions for nonoffice hours or at lunch break so you don’t get sidetracked during business meetings. Additionally, if you and your business partner spend time together outside of the office, make sure to discuss things other than work.

It is important to find a balance with your business partner and agree about how and when to discuss personal matters versus business issues. Nurturing your friendship outside of the office can be healthy, but you also may want to be careful how much time you spend together. Don’t forget that your business started with an idea from two friends—you don’t want anything to come between you.

Create a Founders Agreement

It’s difficult to imagine that your business might not succeed, but it’s best to always be prepared. Of course, you want to believe that your friendship can withstand anything, but it’s best to take precautionary steps in case things go south.

A founders’ agreement is highly recommended. This legally binding document will be a joint agreement between the founders highlighting key guidelines and terms that will structure the different scenarios that may occur. Creating an exit strategy is just as important as creating the initial business plan. A failing business might also put an end to the friendship. While your business might not always be salvageable, a founders’ agreement can at least ensure that matters are taken care of in a mature way, even if you go your separate ways professionally.

Set Clear Fiscal Expectations

Financial discussions, especially among friends, can be awkward. But in a business, this topic is unavoidable and is in fact, the primary purpose behind the venture—to make investments with a goal of growing the business. Setting clear fiscal expectations from the start can help you avoid uncomfortable situations with your business partner further down the line.

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Most startups have zero to little revenue at the outset. The lack of money and resources can cause friction between you and your partner, but if you can prepare ahead of time, you can hopefully avoid conflict. Both you and your partner should be upfront about your financial capabilities, how much you will each be able to invest, and what you expect to be compensated or take out of the business once you start to sell your products or services and generate revenue.

If either party isn’t investing equitably in terms of financial commitment and time and energy, problems are inevitable. If your business becomes extremely successful, the financial gain will play a major factor in the relationship between friends.

When starting a business with a friend, make sure you realize that this friendship is going to permanently change. Running a business with a close friend that you trust and sharing milestones and achievements together is one of the best feelings in the world. Choosing that friend to be by your side throughout the journey may be one of the most important decisions you make, and it can be the deciding factor in whether your venture (and friendship) will fail or succeed.  Choose wisely and you both can reap the benefits along with your entire company.


Sagi Gidali is cofounder & CPO of Perimeter 81, a cloud and network security company.

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