Certainly there are family businesses out there that have been successful. And for many of the things we buy, it's comforting to think that we're helping out a family, that we're supporting a family with our business.
If you think you want to build a family business which will last decades or even generations, then by all means create one and bring your spouse and whichever family members want to work with you. Know that it's a family business and accept the limitations that designation entails.
But if you're looking at a startup that will at some point need outside funding, especially venture capital funding, or are thinking of going public or selling your business to a larger corporation, you may not want to bring your spouse in.
The first company I joined after leaving IBM was a Mom and Pop shop. He was a well-respected professor from UC who had done a technology transfer of a system he and his grad-students had developed. She knew business and finance. It seemed to be a perfect match.
I joined as VP of Engineering and helped develop new technologies and business for the products. Our revenues rose and VCs were flocking to us offering a mezzanine round. Their one condition? One of the spouses had to leave.
I've talked about how hard startups are on relationships. You might think you can mitigate that by having your spouse share your passion and your challenges. And that might be true, especially in a family business. But with most marriages ending in divorce, especially with the pressures added in a high-growth, high visibility environment, and with decisions coming from a larger Board of Directors - no longer just the spouses - all the VCs could see was the damage to the company which would result if the spouses had a falling out.
In another situation, my boss met my then wife at a company function and hired her. Some of this story is recounted in my new novel, The Shadow of God. While we worked in different areas of the company, some of the employees felt she was getting special treatment. Ultimately, when she had to leave the company, she made my life miserable until I left as well. The company failed soon after as much of my team quit not long after I left.
More recently, I have a friend who just hired on to a Mom and Pop business. He was brought in to take over most of the CEO's job. His thought was that the CEO would retire and he'd end up running the business. Unfortunately, the CEO and his wife just can't let go. They keep coming back in and interfering with his plans for expansion. He doesn't get much support from the other employees because if he takes a hard line, they go back to Mom and Pop to complain. I think this is probably a dead end for him and a waste of a lot of commitment and effort on his part.
In one last scenario, I have another friend who joined a Mom and Pop business. She has been responsible for rapid growth in their revenues. And as in the first startup I joined, the wife handles the business side. Unfortunately, the wife is struggling and isn't doing such a great job now that they're growing so fast. She's making bad decisions which have caused several key people to quit. And if anyone approaches the CEO, he sends them back to his wife who gets defensive. While spousal loyalty is great for a relationship, it's not always the best thing for a business.
I could come up with more examples that I've seen in my career. I'm trying to think of any company where two spouse founders have seen great success. I can't come up with any.
So, if you're thinking about bringing your spouse into your startup, do think twice.