The Good, the Bad and the Ugly of Starting a Business with Friends

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.

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When you are running a business with a friend it is easy to take advantage of the friendship. Because my co-founder is my friend, he feels shy about pressuring me to work harder, which can become a vicious cycle: I slack because I feel comfortable around my friend and my friend doesn’t pressure me to work harder because he doesn’t want to mess up the friendship.

Meanwhile, you don’t want to hurt each other’s feelings. There’s no easy way to do it, but if your co-founder is slacking or missing milestones, then you have to call them out. A founding team that is brutally honest with each other and that can respect feedback has a much greater chance at success.


The Ugly

Startups are full of stress, failures, and demoralizing moments. When you run a business with a friend the stress of failure is compounded by your friendship.

In a previous company, my co-founder failed to raise funding within the given time-frame. It was a very tense time because cash was extremely low and the company would fail if we didn’t raise capital immediately. Similarly, I’ve had moments when I’ve gone through a dry spell closing deals. It’s hard to console a friend when your business’ future is at risk.

Failed businesses can lead to broken friendships, and vice-versa. I have seen several failed startups lead to broken friendships. Many times, the founders blame each other for the failure. In other cases, problems that start as personal can end up affecting — or even destroying — the business.

My failed startups with friends have actually led to stronger friendships; it’s all about the level of respect you have for each other. But if you don’t communicate this from the start, it can easily go the other way.


Before Starting Up With a Friend

Would I do this again? Absolutely — though I always proceed with caution. Here’s what I look for in a friend before I ask him to join my team:

  • Do we have complementary skills?
  • Do we have different networks?
  • Do I trust and respect his work ethic?
  • Do I trust and respect his decision-making abilities?
  • Does he have previous startup experience?

Don’t start a company with a friend just because you think it’ll be fun to work together. Start a company because you believe in what you’re doing — and because you each bring a unique skill set and network to the table, improving your chance of success.


Jun Loayza is the Chief Marketing Officer of VoiceBunny and Voice123. He is also an accomplished lifestyle entrepreneur and the creator of the Drop Ship Domination System. In his entrepreneurial experience, Jun has sold 2 internet companies, raised over $1 Million in Angel funding, and lead social media technology campaigns for Sephora, Whole Foods Market, Levi’s, LG, and Activision.

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