Ask Entrepreneur

How Do I Partner with Another Startup Company?

I have my own app startup company and I’m preparing to partner with another startup app company. What is the best way to go about this? Do you think it would be smart to create a subsidiary company in which I hire the other person as a co-founder of the subsidiary?

You can associate or create a joint venture, where you retain control of your own part of the business.

Discuss with an advisor or tax attorney the best fits for what you are doing and the industry. But beware of any type of partnership arrangement or limited partnership agreement. You don’t want to give up pieces of your company before you’ve even started – and there are many other ways to share and leverage resources, skills, contacts and knowledge.

Related: What to Consider Before Teaming Up With a Partner 

Most people team up based on a personal friendship or co-worker relationship. But a good partnership should be grounded in business and treated as a business relationship.

Also beware of bringing in another person and giving them a title, or control over your product, services or resources when you’re really not sure about his or her skills, competence, aptitude and, more importantly, attitude.

Do some additional questioning of yourself and others before making anything official. Once you have a clear vision of what your company is and what you want it to be, you'll be better equipped to make a useful partnership agreement.

Related: Sample Partnership Agreement
 

Share Your Thoughts

Today's Editor's Picks

About ASK ENTREPRENEUR

Ask Entrepreneur is a question-and-answer forum for and by the Entrepreneur.com community. Send in your burning business question, or comment on someone else's now. Have a Question? Ask Now

Topics (over 1000+ answers)

Ask Entrepreneur Q&A Hangouts

Google + Hangout With Shark Tank
Google + Hangout With Jason Falls
Google + Hangout With Angela Jia Kim
Google + Hangout With Grant Cardone

ASK Quick Tips