5 red flags to look for in a business partner, according to an executive psychologist

Co-founder breakups can be brutal. A startup executive psychologist shared the red flags to look out for before going into business together.

• Going into business with someone can be exciting. It can also be highly risky.
• A therapist who coaches co-founders shared red flags to look out for before going into business.
• His best advice? Talk out all the specifics before you sign — and work on a trial project first.

It's hard to beat the rush of brainstorming a genius business idea: the electric back-and-forth over cocktails, the daydreams of a sleek future office, the possibility of making millions.

It's even harder to imagine — and live through — a co-founder breakup. Dr. Matthew Jones, a startup executive psychologist who coaches co-founders, told Business Insider that heavy conflict between business leaders presents "an existential threat to the very existence of the company."

If you and your co-founder can't get along to the point of active contention, you might become involved in lawsuits over control of the company. In worst-case scenarios, the business shuts down completely.

"That's the biggest net loss: everybody goes home, all the employees are fired, the investors lose money," Jones said. "Those are situations I really work hard with teams to try to avoid."

One of the best ways to dodge years of financial and emotional pain is to choose the right business partner from the very beginning. "It's important to know your own psychology," Jones said, such as which values matter to you. There are also a few communication mistakes that universally impact all business leaders, he said, like not going over specific details before you commit.

Much like a marriage, you can't predict how high pressure will impact and change you both. But there are red flags you can look out for prior to legally binding yourselves together.

They don't want your relationship to change

Research shows that there are cons to running a business with a best friend, spouse, or family member, Jones said. The people who do it successfully are the ones who have their "eyes wide open," he said, "recognizing that it will fundamentally change some aspect of that relationship."

If you prioritize business growth, you might have to give very direct professional feedback at some point that could hurt the other co-founder on a personal level. If you can't picture yourself saying that to your childhood friend or younger sibling, that's a sign to reconsider entering a business relationship together.

Avoiding the possibility of change can cause more pain down the road. When parting ways, some of Jones' clients have found it "excruciating" to grieve the loss of a business relationship and a deep friendship at the same time.

They're ego-driven

Going into business with someone who is ego-driven — concerned with status or needing a lot of praise — isn't necessarily a dealbreaker, Jones said.

It can get problematic when the relationship feels one-sided and there isn't a natural give-and-take. If you already notice that the other person can't bend a little or meet you halfway, it will only get worse.

Jones said this is especially worrying if you're a people pleaser. "You might easily default to that role and then later find it incredibly restrictive," he said.

In his experience, co-founders may appear to be very similar in the beginning, during the honeymoon phase of starting a company. But later, one person, usually the one trying to preserve the peace, may start to take issue with the power dynamics at play. The fallout when they start speaking up more can get nasty, particularly if the other person has narcissistic traits.

They can't handle feedback

Every thriving business relies on regular feedback, especially the negative kind.

"If you notice a lot of defensiveness, especially early in the relationship, that's a big red flag," Jones said. "That will get worse under pressure."

To grow, you need to level with each other when the other person doesn't meet expectations. If the other person can't take it, it means they can't grow. That's a death knell for a budding business.

"That relationship actually has to scale," Jones said. "It has to change, not just once."

They skip over specifics

Jones said mismatches in contribution are a common source of conflict. Oftentimes, the issue has more to do with communication than work ethic.

He gave one example he sees often in founding teams: in the excitement of the early stages, one person makes grandiose promises. They say they have a fantastic network that will make fundraising a breeze. What they won't mention is that they don't plan to actually lead fundraising beyond making introductions. Cue: conflict.

You can avoid these issues by getting "granular and specific about those contributions," he said. This is especially important when it comes to factors like work-life balance. You need to be candid about how much of your life you plan to commit to the business. If one person is all in on the business and the other wants to be out by 5 p.m. to see their family, that disconnect spells trouble down the line if you've never talked about it.

These conversations also give you an opportunity to spot a subtler red flag, Jones said, which is a lack of curiosity about you. If they only want to see a flatter, business-only version of you, the relationship might get complicated when your life does, like if you get sick or have to care for a family member.

You haven't done a trial run yet

You might have a wonderful relationship with your hopefully-future partner. They text on time and seem even-keeled.

Still, running a business is a different kind of pressure, one that can bring out communication lapses and wildly different reactions to stress. That's why Jones strongly recommends doing a trial project together — something that ideally takes a few months or even a quarter, where you need to be "explicit about negotiating roles and responsibilities."

It won't perfectly replicate the emotional rollercoaster of heading a startup together, he said. "But being able to go through ups and downs with someone will reveal more about their deeper character than superficial pleasantries."