:: Three partners, three companies, ten years ::
It’s all sunshine and rainbows when you first work together but do you have what it takes to sustain the relationship? I was inspired to pen this post on the heels of a breakup with my third business partner in ten years. Now, I know how this looks! I am the common denominator so it must be all my fault. And maybe it is, but at least I now have the self-awareness to know that I need to consider hiring out the function rather than creating a legal partnership. Here’s a breakdown of some of the biggest mistakes I made early on in my career and how I plan to course-correct moving forward.
Evaluate if you actually need a business partner
In my first two companies, I made the mistake of taking on partners because I was scared to walk this path alone. I felt like I needed company and caved at the idea of doing it all by myself. A business partner meant I had someone else to blame if anything went wrong. Now hearing myself say that out loud reminds me that it wasn’t a real partnership in the truest sense of the word. I didn’t want to take full responsibility or carry all the weight on my shoulders. From the jump, I admit, it started with a cracked foundation. Not only rooted in insecurity but I fell in love with the idea of having a partner but was not prepared for the reality.
What people don’t tell you is that a legal partnership is equivalent to a marriage. This may not be your life partner, but hell, if your business is your life, then it’s pretty damn close. That being said, imagine the insanity that spiraled from decided to split up? Feelings are hurt, dreams are crushed and all the shit you’ve buried is finally said. I’ve never been divorced but I believe it’s just as painful. But I had to experience it all so that I could get my head out of the clouds and have two feet planted firmly on the ground.
I wish I asked more questions
Leading up to my engagement 6 years ago, my fiancee and I read a book called 1001 Questions To Ask Before You Get Married. We proactively prepared for our future and did everything with intention. But not many people take the same approach when it comes to their business partnerships. I’ve spoken to many individuals who thought friendship was the only grounds for being co-founders (and in some cases we have seen this play out in a positive way), however, take my advice. This is from someone who did just that and didn’t experience a happy ending; ask more questions and do it often.
What interests you in this business idea?
What have you failed at before?
What are your strengths and weaknesses?
What are your expectations of me?
Does this potential candidate have a history of business ownership?
What is their reputation?
Obvi no one is perfect, but you don’t want to launch a project, business or enter a new industry without alignment on the vision, company goals and what is required of each other.
There were no contracts involved
A handshake won’t hold up in court. My first two business partners joined off the strength of a verbal agreement. We were young and dumb. It’s irresponsible not to have your paperwork in order. My father had to beg me to get a lawyer for 2 years before I took him seriously. So last year I finally said, OK stop. I’ll make an appointment and see what this is all about. Girlfriend, it only took one meeting with my legal team to blow my mind. Another indication that I still have so much learning to do. And you know what they say, “the more you learn, the more you earn.” My lawyer got me all-the-way-together. We created a new non-disclosure agreement, a non-compete for my employees, I also incorporated my company and my legal team creates the contract for any staff who comes on board. I didn’t know or maybe I didn’t care to know. But once you download new information into your brain, you can no longer have any excuses. No matter what level you’re at in your business, having a legal team is important. A great resource I can also suggest is Small Business Bodyguard.
There was no plan in place for conflict resolutions
Effective communication is about active listening. And when you hire someone who has a difference of opinion sometimes it’s a hard pill to swallow. The upside to bringing a new partner onto the team is their ability to look at the world through a different lens and bring fresh, new ideas to the table. But what if those ideas don’t align with the company vision? What if you both are different, too different and as a result timelines aren’t met, projects aren’t executed, client relationships are lost and years go by and the business has not scaled. Working in a team environment has been an eye-opening experience but you want a collision of ideas that are met with maturity.
Listen, it isn’t all bad. I know many co-founders who have thriving partnerships. I’ve learned a lot about myself and others throughout each exit. I just wanted to drop a line to help you consider your own transition before you make the same mistakes I did.