Many entrepreneurs and startups would never have been formed if it weren’t for partnerships –as in dual ownership of a business entity. Many depend on one partner contributing capital, while the other contributes intellectual capital; some depend on complementary skill sets, some depend on sharing time spent working on the business and multiplying what working together can do. No matter your reason, think long and hard before going into a partnership with someone.
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The reality of a partnership is that they are just like marriages, but many times, without the long vetting process of a courtship. Just like a marriage the percentages of survival are often against you. And just like in a marriage, a partnership involves balancing a huge mix of issues like: division of the work, who is the final decision-maker, work styles, money decisions, egos, perceptions & promises, and stress. Then as time goes by, uncover the skeletons in that person’s closet and you start to see why, in reality, it may have been better to go it alone.
If you’re still set on a partnership as the only way of making your entrepreneurial dream a reality then I suggest the first thing you do is see a business lawyer to protect yourself and your interest in the business. One of the things they may have you work through is a partnership agreement similar to the one on our Resources page. Leave a comment for me below (no need to post your email address), if you’d like it sent to you as a word document. If you think through as many of these things as possible you will no doubt improve your odds. I’d also advise you to be on guard if your future partner wants to gloss over any of the points in the agreement. Items like number 11, amount of time contributed, or item 13, whose decision will prevail, should be considered for all potential possibilities, as they will undoubtedly become important as your business evolves.
One thing that is not mentioned in this list is the idea of ‘full disclosure’. No matter how long you’ve known the person or even if they are related to you, I recommend having a background check done and credit score pulled for all involved parties. Finding out months into a partnership that your partner isn’t exactly what they claimed to be can be a rude shock and game changer, better to find out right away.
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