A thread on business partnerships.
Everyone seems to have nightmare stories about them.
How do you make them work?
Here are some lessons learned.
1/x
Everyone seems to have nightmare stories about them.
How do you make them work?
Here are some lessons learned.
1/x
Have a written "divorce" planned at the start.
My favorite is a push-pull single-trigger buy-sell:
Any party can decide they want out. Party A offers Party B $x/share. B has 60 days to sell or buy out A at the same terms.
Lawyers can put this in.
2/x
My favorite is a push-pull single-trigger buy-sell:
Any party can decide they want out. Party A offers Party B $x/share. B has 60 days to sell or buy out A at the same terms.
Lawyers can put this in.
2/x
Mentally prepare yourself to be rich and not king.
This is easier said than done.
You have to put your ego and often your pocketbook as a secondary thing to have everyone winning together.
3/x
This is easier said than done.
You have to put your ego and often your pocketbook as a secondary thing to have everyone winning together.
3/x
Have a clear tie-breaker system.
50/50 partnerships are a disaster waiting to happen.
You're not always going to agree -- I promise.
Someone needs to be the alpha.
If no one wants the job, reconsider your partner choices.
4/x
50/50 partnerships are a disaster waiting to happen.
You're not always going to agree -- I promise.
Someone needs to be the alpha.
If no one wants the job, reconsider your partner choices.
4/x
Create partner alignment around goals.
Talk about your near-term and long-term goals.
Are they aligned?
Write them out. Have everyone sign off on them to verify they are.
Things like cash flow, cash in, etc all matter.
5/x
Talk about your near-term and long-term goals.
Are they aligned?
Write them out. Have everyone sign off on them to verify they are.
Things like cash flow, cash in, etc all matter.
5/x
Choose the right partners.
Business partnerships are like a marriage - except they often last longer and are harder to exit.
Just like marriage though, who you choose is the most important decision. Don't rush it.
6/x
Business partnerships are like a marriage - except they often last longer and are harder to exit.
Just like marriage though, who you choose is the most important decision. Don't rush it.
6/x
Clearly define roles.
Too many partnerships start off without defining responsibilities and roles.
You look up and one person is owning 20%, doing all the work, and not getting paid.
Write. It. Down.
7/x
Too many partnerships start off without defining responsibilities and roles.
You look up and one person is owning 20%, doing all the work, and not getting paid.
Write. It. Down.
7/x
Be honest.
From day 1, your partnership needs to be a safe space to tell the truth.
If you can't do that, it's akin to getting married to someone for their looks. It's going to end badly.
8/x
From day 1, your partnership needs to be a safe space to tell the truth.
If you can't do that, it's akin to getting married to someone for their looks. It's going to end badly.
8/x
Spouses need to be aligned as well.
If you're going to deal with a married person, remember there is a "virtual" person at the table -- the husband or wife.
Talk about it: Is everyone's other ok with this? If not, you got a timebomb on your hands when they sue during divorce.
If you're going to deal with a married person, remember there is a "virtual" person at the table -- the husband or wife.
Talk about it: Is everyone's other ok with this? If not, you got a timebomb on your hands when they sue during divorce.
Paper that stuff.
You need to have a lawyer represent each partner prior to the formation to protect their interests.
Get the legal documents done right by a real lawyer who has done it before.
And read them to make sure you understand the deal.
10/x
You need to have a lawyer represent each partner prior to the formation to protect their interests.
Get the legal documents done right by a real lawyer who has done it before.
And read them to make sure you understand the deal.
10/x
Always assume the best intentions.
The same secret to staying in a happy marriage is the same in business -- always assume your partner has the best of intentions.
It's simple but it works, I promise.
11/x
The same secret to staying in a happy marriage is the same in business -- always assume your partner has the best of intentions.
It's simple but it works, I promise.
11/x
Run the partnership professionally.
Too many businesses intermingle personal expenses with professional.
It creates total nightmares when you are arguing about whether it's fair for a 29% partner to expense their golf outings.
12/x
Too many businesses intermingle personal expenses with professional.
It creates total nightmares when you are arguing about whether it's fair for a 29% partner to expense their golf outings.
12/x
And that's it.
Thanks for tuning in.
What am I missing?
13/13
Thanks for tuning in.
What am I missing?
13/13
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