In a non-control deal, an investor cannot fire management. Therefore, the primary diligence focus must shift from the business itself to the founder's character and the potential for a strong partnership, as this relationship is the ultimate determinant of success.

The founder’s 76-year-old partner, having been "screwed over" in past deals, acted out of extreme self-preservation. This past business trauma led him to prioritize his own financial security at all costs, even if it meant reneging on promises to his trusted partner.

When you can no longer genuinely sell your startup's vision to employees or investors because you've lost faith in its mission or viability, it's a sign to leave. This internal conflict, or cognitive dissonance, is detrimental to the company and your own integrity.

Unwillingness to talk about finances is a significant warning sign in a relationship. This secrecy often indicates underlying money problems, poor spending habits, or a hidden lack of resources. Open financial communication is essential for building a stable and trusting partnership.

The difference between a true partner and an employee is whether you seek their counsel on complex problems. If you consistently go to them for advice when you're unsure, they're a partner. If you only give them direction, they are not a "thought partner," which is a red flag for a C-level executive role.

Kevin Bartlett's story shows how relying on a handshake deal with a trusted, older partner led to a complete loss of his expected multi-million dollar exit. Good intentions and personal relationships are not a substitute for formal contracts when business stakes are high.

Beyond not competing with partners, genuine trust is built by preventing "extreme favoritism to the bigger partner." Partners watch to see if you provide a level playing field for everyone, regardless of size. Trust is also solidified by how you act when things go wrong; a vendor that "shows up" during a crisis builds loyalty.

A rising tide lifts all boats. The true test of a founder partnership emerges during downturns. Diligence should focus on teasing out traits like adaptability, humility, and accountability, which predict how a founder will react when plans inevitably go awry.

When Kevin attempted to buy the company he built, his partner inflated the valuation. The partner knew Kevin was emotionally invested and understood the business's true potential, using that knowledge as leverage to demand an overpayment, a common tactic in internal buyouts.