The key to unlocking Co-founder Partnerships — with lessons from Berkshire Hathaway & Access Bank

February has been an important month for partnerships. Valentines’ day reminds us of the importance of romantic partnerships. However, this February has also (unfortunately) marked the demise of Mr. Herbert Wigwe, one half of the partnership that created the largest banking institution in Africa today. Similarly, a few days ago, in his legendary annual letter to his shareholders, Warren Buffett penned a touching tribute to his long-term business partner Charles Munger, who passed away last year. These act as a stark reminder that sometimes, in the life of a founder, the most important relationships are not necessarily romantic relationships.

The case for forging partnerships is clear — building a business, while rewarding, is often gruelling and can be extremely lonely. Building with one or more co-founders has the potential to lead to supercharged growth and provide moral support through the daunting entrepreneurial journey. Yet, it can be a double-edged sword. According to Harvard Business School Professor Noam Wasserman, 65 percent of high potential start-ups fail due to conflict among co-founders. The stakes are high. For co-founders building high growth start-ups, neglecting the co-founder partnerships is done at the peril of the overall business. It not only leads to the eventual downfall of the business, but potentially at a high emotional cost and financial cost.

In the spirit of February — the month of Partnerships, here are some pointers on how build a strong relationship with your co-founder:

1. Define Roles: A lot of co-founder conflict stem from misalignments and conflict on roles. In his book, leaving the Tarmac, Aigboje Aig-Imoukhuede, the co-founder of Access Bank, clearly stated how he and Herbert Wigwe clearly delineated roles once they had successfully purchased Access Bank. Aig-Imoukhuede would go on to be the CEO for just over ten years before handing over to Herbert. Similarly in his tribute to Charlie Munger, Warren Buffet clearly stated their roles over the years. In his words, “Though I have long been in charge of the construction crew, Charlie should forever be credited with being the architect.” Mapping out clear roles involves clarifying day to day responsibilities based on expertise and strengths, defining how decisions will be made, defining who will make decisions for each key business activity, and having clear titles.

2. Sign a founder’s agreement: What is the worst that can happen? Assume it will happen and incorporate it in an agreement. The strongest partnerships are equally backed by agreements that eliminate grey areas: what happens if a partner decides to exit the business or decides to retire? What sort of vesting schedule will each partner adopt? What are each partner’s key roles? How will decisions be made and how will any disputes be resolved? The process of creating the founder’s agreement invariably leads to a lot of scenario analysis that will aid the business in the future. Make sure your founder’s agreement is thorough, legally sound, and accessible to all partners. Make sure to regularly review and update them as your business evolves to reflect changes in roles, responsibilities, or goals.

3. Check in regularly: Like in marriages, co-founders should regularly have state-of-the-union conversations — heart-to-heart chats that ensure everyone is on the same page. Schedule regular meetups to check in, share progress, and tackle challenges together. These moments provide a chance to celebrate wins, identify areas for improvement, and address any brewing issues before they escalate. Use this time to set goals, track performance, and brainstorm new ideas.

4. Check in beyond work: The best partnerships have a strong foundation in trust. To foster trust and closeness, it’s important that co-founders find time to strengthen their bond beyond work and create an environment where both partners feel safe. It’s no surprise that Warren Buffett wrote referring to Charlie Munger — “In a way his relationship with me as part older brother, part loving father”. Similarly, Aig-Imoukhuede and Herbert Wigwe were reportedly close, referring to each other as brothers.

5. Stop-seeking the limelight: Partnerships where both or one partner is seeking the limelight are often laden with conflict. The best partnerships focus on first building a great company, and then bringing the business, not themselves into the limelight. Co-founders can learn a lesson on this from Charles Munger. “Charlie never sought to take credit for his role as a creator but instead let me take the bows and receive the accolades”, wrote Warren Buffet. Warren credited Charlie with re-directing the focus of Berkshire Hathaway from buying fair companies at a great price, to buying great companies at a fair price. Charlie was the visionary and the architect. Yet he was content to let Warren Buffet take the limelight.

6. Seek external help if needed: Sometimes partners are unable to resolve conflicts together. For many, these could be because a lot of the key questions and conversations didn’t take place at the beginning. As responsible founders who may have taken external funding from investors or friends and family, it is imperative that founders do their best to resolve the conflict. So, reach out to a business coach, therapist, trusted mutual friend, or even an existing trusted investor who can serve as a mediator and help to resolve the conflict.

65 percent of businesses fail because of co-founder conflict. Here’s to being in the 35 percent.