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Adding a partner…should we consider a pre-nup?

A Second View of the World
So, you are thinking of acquiring a partner in your business.  Maybe you want a partner to spread the workload or liability.  You could have differing areas of expertise and want to become a “one stop shop”.

Think before you get engaged and sign those final papers! 

As one Company President put it, “a partnership is like a marriage without the good parts.” 

Consider these suggestions, before moving forward as suggested by my TAB Board

  • Each party invests the same amount of money
  • A change in equity equals a change in authority
  • You have to trust all parties involved, even minor partners
  • An exit strategy must be as clear as possible before entering the partnership
  • Be sure a full-fledged business plan is in place, including all stages of the business
  • Get a signed management agreement from all parties involved
  • Work with an HR consultant to predict behavior and discuss potential hotspots
  • Expect to invest 20% more money and 20% more time

These pointers can come in handy even if you are considering a strategic business partnership or affliation.  Because as we all know, “breaking up is so very hard to do.”

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