{"id":515,"date":"2013-10-03T20:14:39","date_gmt":"2013-10-03T20:14:39","guid":{"rendered":"https:\/\/www.bfvlaw.com\/picking-a-partner-a-primer\/"},"modified":"2013-10-03T20:14:39","modified_gmt":"2013-10-03T20:14:39","slug":"picking-a-partner-a-primer","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/picking-a-partner-a-primer\/","title":{"rendered":"Picking A Partner:  A Primer"},"content":{"rendered":"<p>There are many good reasons to partner with others in a business venture.\u00a0 Partners can bring skills, capital, knowledge and connections that complement your own.\u00a0 Partners can help do the work and share the risk.\u00a0 But there can be drawbacks as well.\u00a0 Having a partner means shared decisions, which can make a company less nimble in a competitive environment.\u00a0 It also means sharing profits.\u00a0 Much like choosing a spouse, selecting a business partner is not a decision to be taken lightly. <\/p>\n<p>Whether a prospective business partner is a new acquaintance or an old friend, vet him thoroughly.\u00a0 Just because someone was a fun college roommate does not mean you should trust him with your financial future.\u00a0 Consider performing a background check, and offer to share the results of one performed on you.\u00a0 Exchange personal financial statements and credit reports.\u00a0 If your prospective partner has a bankruptcy in his past, you want to know that before it is time to qualify for a loan or other funding.\u00a0 Yes, these are sensitive topics.\u00a0 All the more reason to have the discussion on the front end. <\/p>\n<p>When you are satisfied that there are no closet skeletons to fear, have a detailed discussion with your partner about \u00a0objectives, expectations, money, operations and exit strategies.\u00a0 Too many partnerships begin without thinking through key issues. Discussing and negotiating the nuts and bolts of the relationship will offer a glimpse of what it will be like to be in business with your new partner. <\/p>\n<p><span style=\"text-decoration: underline;\">Objectives and Expectations<\/span>:<\/p>\n<ul>\n<li>Does your partner view the enterprise as an \u201call-in\u201d 80 hour per week operation, or a lifestyle company that will allow more time for family and travel?<\/li>\n<li>Does he envision a long term commitment or does he want to sell out in three years?<\/li>\n<li>What sort of income does he reasonably expect to achieve?<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline;\">Money Issues:<\/span><\/p>\n<ul>\n<li>Will each partner make an initial contribution to start the company? If so, should any portion of that contribution be treated as a loan, or will it all be a capital contribution?<\/li>\n<li>If the company gets into a financial bind, what are the obligations of partners to put in additional capital?<\/li>\n<li>How will partners be compensated? Will each draw a salary?\u00a0 If times are tough, will that salary be deferred?<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline;\">Operational Issues:<\/span><\/p>\n<ul>\n<li>Is a certain partner going to be in charge of day-to-day operations? What are the limits on the authority of the partner in charge of day-to-day operations?<\/li>\n<li>Will there be a division of responsibilities and labor between the partners?<\/li>\n<li>How much of a time commitment is expected of each partner?<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline;\">Legal Issues:<\/span><\/p>\n<ul>\n<li>What are the partners\u2019 \u201cduty of loyalty\u201d expectations.\u00a0 Can a partner work for or be involved with a competitive company?<\/li>\n<li>How will the partners resolve issues of deadlock?<\/li>\n<li>Are there restrictive covenants you want to impose on the partners?<\/li>\n<li>If the business is successful, at what point do you want to sell? If it is not profitable, at what point do you pull the plug?<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline;\">Exit Strategy:<\/span><\/p>\n<ul>\n<li>What are the partners\u2019 respective exit strategies?<\/li>\n<\/ul>\n<p>Once you find common ground on these issues, have your agreement written up by counsel.\u00a0 Sign it and make sure your partner does so too.\u00a0 Keep your copy! \u00a0By working through these issues on the front end and memorializing that agreement, you maximize the opportunity for a successful business partnership.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are many good reasons to partner with others in a business venture.\u00a0 Partners can bring skills, capital, knowledge and connections that complement your own.\u00a0 Partners can help do the work and share the risk.\u00a0 But there can be drawbacks as well.\u00a0 Having a partner means shared decisions, which can make a company less nimble [&hellip;]<\/p>\n","protected":false},"author":21,"featured_media":516,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,6,8],"tags":[27,34,24,48,23,37,35,22],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Picking A Partner: A Primer<\/title>\n<meta name=\"description\" content=\"Having a partner means shared decisions. 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