The Pros and Cons of Going Into Business With a Buddy

By Jun Loayza, YEC, 02-09-2013

I’ve built five companies in my startup career, four of which I started with close friends. It’s quite common to build a company with a close friend: you get together, think of a cool idea, and decide to get started. Why not, right? While it can be extremely fun to start up with someone you’re close to, it’s not without disadvantages.

So before you and your friend get started, take the time to analyze the good, the bad, and the ugly side of starting a company with a friend.

The Good

1. You have a friend in the trenches. Entrepreneurship can be lonely. My friends who work 9-5 during the day tend to party hard at night. I can’t keep up with that lifestyle as a 24/7 entrepreneur. When we do hang out, I just want to talk about ways to improve my startup — whereas they want to talk about anything but work. That’s why it’s so fun to start up with a friend. You have someone you can confide in and relate to, at times when not everyone understands.
2. Your friendship sets the tone for culture. Good company culture keeps morale high, attracts top talent, and keeps employees loyal. My co-founder and I often conduct interviews together so that the prospect sees our dynamic interactions and feels how fun it is to work on our team. Because we’re friends, we don’t hesitate to throw a get-together at my place or a poker night at my co-founder’s place.
3. You understand each other’s strengths and weaknesses. It was easy for my friend and I to assign roles and responsibilities, because we knew each other so well. He was emotionally stable, organized, and focused on the big picture, so it made sense for him to be CEO. I was the hustler with the do-whatever-it-takes attitude, so it made sense for me to lead the CMO position. >>>