How to Develop a Trusting Financial Relationship With Your Business Co-Founder

Apr 21, 2021 | First Person

By Joshira Maduro, Content Research Analyst with LendingTree in Charlotte, North Carolina

It can feel awkward to talk about money in any relationship, especially when we’ve been socialized to believe that discussing it is taboo.

When it comes to you and your business co-founder, however, talking about money is a must. Yes, there is still some business etiquette to keep in mind, but it pays off to lean into this discomfort. Learning to communicate openly and honestly together about the nitty-gritty of finances can take time and practice, but it will build trust, set healthy expectations and help you avoid personal and business conflict.

How to develop a money strategy with your co-founder

Align on business expectations

There are countless ways to evaluate success, and it’s critical that you and your co-founder are on the same page about business goals and expectations. You’ll need to decide what metrics matter (e.g. quarterly revenue, email open rates, social media followers) and who will track them. You may want to discuss what method you’ll use to track performance, such as OKRs or KPIs.

There’s no right or wrong answer, but it is important you agree on what success means for your business. If this feels overwhelming, research to see what other business owners in your field typically do.

Identify each other’s strengths and weaknesses

Everyone has their strong suits and their blind spots, and being aware of yours and your co-founders’ can ensure you’re each in roles that play to your strengths.

For example, say one of you is a creative “big ideas” person, and the other is more tactical and detail-oriented. If the big ideas person is put in charge of operations or finance, and if the more tactical person is put in charge of creative marketing, it’s likely neither will thrive and the business will suffer.

Figure out where each of you shine, and make sure your roles reflect that. If you’re uncertain, consider taking an assessment like CliftonStrengths (formerly StrengthsFinder). If it turns out there’s a gap—like neither of you have an interest in or aptitude for bookkeeping—it may signal a need to hire someone with those skills.

Determine how you’ll raise funds

Few entrepreneurs are fortunate enough to be able to launch their business with cash. Once you and your co-founder assess your startup costs, explore your financing options:

  • Small business loans: Loans are ideal if you need a large one-time sum, and they range from government-backed SBA loans to flexible loans from online lenders. Shop around since amounts, requirements, terms and interest rates can vary widely. There are even financing options geared specifically toward women.
  • Personal or business credit cards: While credit cards typically have higher interest rates than loans, as a revolving form of credit, they offer more flexibility. You can borrow smaller amounts and re-borrow funds as you pay off your bill.
  • Lines of credit: Another form of revolving credit, personal or business lines of credit allow you to draw from your credit line, and borrow money again as you pay it back.
  • Business grants: Unlike loans or lines of credit, business grants don’t require repayment. However, application can be time-consuming, competition is stiff and there are often spending guidelines. Grants are offered by numerous government agencies, businesses and organizations, with some geared toward women and minority-owned businesses.
  • Investors: Another option is to seek out investors, such as seed funding/angel investors or venture capital firms, which offer financing in exchange for equity in the business.
  • Other financing strategies: If you’re struggling to obtain business funding, there are other options like merchant cash advances, accounts receivable factoring and equipment financing, though these can be costly and best used as a last resort.

Discuss equity and salary expectations right away

As you and your co-founder get clarity on your funding strategy, it’s also important to discuss compensation. It may feel uncomfortable to ask for what you want, but it’s crucial to have an open dialogue upfront to avoid future problems or hurt feelings. Speak candidly about expectations for salary, equity and any benefits.

It’s smart to get everything in writing so you feel confident moving forward. You may want to have a small business lawyer help draw up a partnership contract and guide the process.

Create and stick to a budget

Your new business’s budget may be tight, making it vital to avoid overspending that eats into your profits.

Work with your business partner to determine your ongoing business expenses, plus one-off purchases you can plan for. Ideally, your income will cover all the essentials. If a large purchase comes up and you don’t have enough capital for it, you can evaluate if you need additional financing, such as a small business loan. In general, though, a budget helps you ensure you’re not spending beyond your business’s means. Don’t hesitate to hire a savvy financial planner or accountant to help you set up a budget.

Talking about money shouldn’t be taboo when it comes to you and your co-founder. Learning to tackle these tough topics together will help build both a stronger relationship and stronger business.


Joshira Maduro joined the LendingTree team in April 2020, where she covers credit card news. She utilizes her background in market research and branding to develop insightful pieces on better ways to spend and travel.

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