Geneoscopy is a brother-and-sister-led business that develops diagnostic tests to check on gastrointestinal health. CEO Andrew Barnell says he often get comments from people who say they could not start a business with their sibling. But while overall it's exciting to work with family, there are challenges. Some of those challenges can be mitigated by steps entrepreneurs can take up front.
In forming the business, Barnell says some of the important things they did, and what anyone starting a business with multiple founders should do, is to establish at the outset an operating agreement or articles of incorporation that spell out each person's role, ownership, and the expectations for everyone.
"Those types of things are all really critical for a business in the early stages, regardless of the relationship between founders," he says.
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In one sense, working with family can be exciting because it adds another dimension to the family relationship.
"It's fun, especially when you spend so much time with family, to also have shared interests and that includes business or work interests," he says.
There's also an inherent level of trust.
"You're starting a business with someone that you know extremely well and can rely upon," Barnell says. "Going through a process of scaling and building a company, finding that small group of people that you can really trust and depend on, can be hard. Having it be a family member, who, in our case, we had known for 25 plus years before we started the business, that can be really powerful."
Still, there are some potential areas of concern — things to watch out for — when starting a business with family.
"Everyone knows that things don't always go well, in business," Barnell says. "There's no shortage of bad stories about things not ending well. That type of challenging dynamic can be a lot more difficult with a family member. It's a lot more difficult to break up with a family member than a business partner. So, all the more reason to spell things out up front, make sure everyone knows all of the potential outcomes in that you have a good level of communication and just to make sure If there's no misconceptions down the road."
Barnell spoke on the Smart Business Dealmakers Podcast about launching Geneoscopy, structuring the business and working with family. Hit play to catch the full conversation.
