Especially when cash flow is tight, partnering with another business to develop a co-branded product or service can be a lucrative way to locate untapped customers without having to shoulder the economic and creative burden all on your own. Properly planned and executed co-branding arrangements can be highly profitable for all parties involved. However, there […]
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By far, one of the most common mistakes I see business partnerships make with their partnership agreements—after not having one—is taking a “Ron Popeil” approach. The worst thing you can do with your partnership agreement is “set it, and forget it.” Your partnership agreement is a living document. There are regular changes to the tax
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Your business, your partners, and your individual requirements are unique. A personalized discussion and tailor-made partnership agreement are needed to give your partnership that best chance for success. A qualified business attorney who has the experience necessary to have a granular and structured conversation with you and your partners should draft your partnership agreement. Additionally,
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When I work with partners on developing a partnership agreement for their business, I always make sure to hammer home one point: The partnership agreement is meant to help you avoid disputes and litigation at all costs. Why? Because you and your partners won’t always agree. There is an immense cost to litigation for a
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Despite being entirely equal, a 50-50 equity split can leave business partners vulnerable to deadlock. The super-minority equity division (49-49-2) is a potential work around. However, many business owners aren’t comfortable giving a 2% ownership stake in the company to someone to act as a tiebreaker. Fortunately, there is another way that many partnerships decide
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Partners in new multi-owner businesses have the option to choose between numerous ownership structures. The most common equity division is the 50-50 partnership. However, this “even split” is not without its pros and cons. Another common structure is the 49-49-2 partnership where a third partner is given a super-minority stake in the business. The 49-49-2
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Of the various ways to divide partner equity in multi-owner businesses, the 50-50 partnership is one of the most common. In fact, many companies use the 50-50 equity division by default. And why not? It takes very little forethought and (at least on the surface) should make everyone happy. But just because it’s widely used
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Partners in new multi-owner businesses all have to tackle the question of equity division. The “established wisdom” about how to divide partner equity is varied and much of it is short sighted. The last thing you want is to do is create long-term resentment because of how this process was done. We’ll dive into the
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Someone once said to me, “Hope for the best, but plan for the worst.” I think this adage perfectly encapsulates my approach to business partnerships. At the beginning, everyone is excited about the potential and what the future holds. I will never want to crush that optimism, but my job is help business owners protect
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