Me And My Partner: 'We thrive on mutual trust and respect'

After meeting at investment bank Rothschilds, Stephen Louis and Jonathan Scherer founded venture capital company Sevenpeaks in 2001. Their latest business, PayRole, a payroll outsourcer for SMEs, was launched last year

Stephen Louis

I left Rothschilds in 2001 after eight years. My job was providing finance for entrepreneurs to go off and develop their businesses. I decided that rather than investing on behalf of the bank, it was time to be more enterprising with my own money.

I've got a young family and part of the motivation for doing it was a lifestyle change. Even though it's extremely hard work, at least we are masters of our own diaries.

Although I knew of Jonathan at work, I didn't get to know him properly until we worked on a project together. We worked together every day for a year or so, and you can learn a lot about somebody between the hours of nine and five. It is a very good basis for a partnership based on a professional rather than a social foundation. You can be very good friends with someone and not know the first thing about their professional capabilities.

When I got to know Jonathan, I saw he had extremely high moral and personal standards and that's very important to me in any relationship, but especially in a business one. He's someone I can completely and utterly trust.

When we bought our second company last year for example, I had already booked a holiday with my family, so I gave him power of attorney and left him my cheque book and he completed the deal while I was away.

He was quite a high-flyer at Rothchilds and he is a very able person. In terms of our skills I think we are quite complementary. Although we have some core values that bind us together, he is much more logical and orderly. He is extremely hard-working and thorough and diligent. Once something is decided, he really makes it happen.

We worked in the same office for the first year-and-a-half, but now we have got a couple of companies on the go, we have to divide our time. We probably spend two or three days a week together, but it is more likely to be at one of the other companies or at each other's home offices.

In a way we don't really have time to sit together anymore because we are doing different things. We tend to be out at one or other of the companies or working on specific issues.

We have quite well-defined roles, but they are fluid. It's not something written down on a piece of paper. It's evolved over a period of time and will continue to do so. The position today is that I have principal responsibility for one business and Jonathan is chairman of the other.

We are working on our next transaction at the moment and if that goes ahead it will require more flexibility in our current roles. The flexibility hasn't led to any kind of conflict. That tends to arise when there's not enough work to do and people are fighting over responsibility. We are always so busy it might be a problem we aspire to rather than one we actually have to face.

There isn't a formal legal agreement that binds us together as a company. It works well because at the end of the day if either of us wants to go off and do something different, then other than the moral commitment side of things - which we both take very seriously - there's nothing stopping us from doing it. There is a strong mutual sense of trust and respect, though. If one of us wanted to do that, we'd find a way to make sure it works, rather than leaving one or other in the lurch.

Jonathan Scherer

I spent much of the Nineties working in Brazil and came back to the UK in 1999. Moving back to the City was a bit of a culture shock. I had a vague sense that if I was ever to do my own thing, I should do it now.

I started working with Steve on a project. We were going out to look at venture capital-type investment opportunities for the bank, but we ended up basically going out and trying to find things to get involved in ourselves.

I've never really had much time for the complicated politics in a large organisation. I'm much happier and feel much better working with people who are very straightforward and say what they think. In that respect Steve and I are extremely similar. We are very different sorts of people, but we are comfortable being very open with each other about everything.

If something is bugging us, whether it's about him as an individual or about me, or something relating to a deal, we will just say it. I can't think of any occasion when we've had a major problem. We have always managed to bring them out in the open and discuss everything happily.

There are people who are loners and their psychological mix works best on their own, but I don't think I work best that way. I wouldn't be comfortable doing this solely on my own. I appreciate having a partner involved in what I'm doing. When you are making difficult decisions it is going to be quite stressful at times. A partnership that works well can be very healthy in that context.

If somebody else buys into your ideas and plans and is excited and enthusiastic about it, it helps boost your own confidence. Steve is an enthusiast. He is very industrious and hard-working and I'm flabbergasted by the amount of energy that he manages to bring, particularly given that he's got three small children.

He is extremely creative. He has spent a lot of his career starting media companies and he can think creatively in a way I'm not very good at doing. He'll come up with some of the creative ideas and we'll bounce them around between us and end up with something that is stronger than it would be otherwise.

There isn't a legal entity that binds us together. The reason for that is just the way the tax system works. If we had an overall company which we owned, which then acquired other companies, it would be less tax beneficial to us than acquiring the companies directly in our own names.

I knew Steve fairly well when we went into business and I had an underlying belief in the partnership before we embarked on it. If you've got that, the problems that come along are really fairly irrelevant. The sorts of challenges we have faced have been to do with external factors and how they affect the business. In a funny sort of way it has helped the partnership because we have had to stand very solidly together.

The relationship is easier today. We had that gut feeling about each other, but it was more difficult to begin with, taking all the risks and trying to do it for the first time.

It might be interesting to see whether in a few years, when there are less practical, day-to-day demands on us, we will find ourselves drifting apart. Although I doubt that day will ever come, we will always find plenty of work to keep us busy.