Thinking of going into business with a friend? Your relationship could cost you, according to research.

Researchers at Harvard University, in a study looking at friendship among venture capitalists, found that those who paired together based on how much they liked each other - as opposed to basing the decision on ability - were likely to see less success on their investments.

'The Cost of Friendship' report by three authors - whether they are friends or not is not known - studied more than 3,500 venture capitalists from 1975 to 2003.

The study showed that if business partners of the same minority group worked together, their chances of a successful return dropped by 25 percent.

By the same token, those partners who went to the same college saw their chance of success drop by 22 percent, and by 18 percent if they started a business together before.

The report said: 'Collaborations based on characteristics unrelated to ability might suffer from a 'cost of friendship' and induce a negative relationship between affinity based similarities and performance.'

If you want to see a real-world example, just look at Mark Zuckerberg and Eduardo Saverin. While the pair have both reaped millions - in Zuckerberg's case, many billions - the pair had an hugefalling-out in the early days of the social network, as was portrayed in the film The Social Network.

The researchers said that the flip-side of working with friends included working with too many similarly-minded people, all sharing certain strengths and weaknesses, and potentially having poor decision-making as decisions would be made on a group basis.

However, it is unlikely that this report will stop friends starting businesses together - it is one of the most popular ways to set up a business.

But, as the authors, warn: 'To paraphrase Ralph Waldo Emerson, you cannot afford to be stupid with old friends when you are venture capitalists co-investing together.'

(Read by Nelly Min. Nelly Min is a journalist at the China Daily Website.)

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(Agencies)