Difference between Friends and Business Partners
OK a lot of people tend to want to invite friends to be business partners because of their experience and loyalty in regards to the project. This is perfectly fine, except one thing. You MUST and I mean you MUST declare lines in the proverbial sand with your friends to distinguish where the Partnership and the Friendship lines are not to be crossed.
Here is an example:
Lets say that you offer your friend some stock in your new startup in lieu of payment, since lets face it your broke. Offering a friend with experience in something you need to make your start up succeed is completely practical. Here is where the lines get blurred and you need to make the new partner realize their role in the company. By providing them stock in the company you have now given them a partial say in the company depending on how much stock you have given this partner (which is why I never suggest offering more then 30%). With this new ability you need to let the new Partner realize the limits of their power using both a formal document for the stock as well as a sit down to discuss their responsibility. By doing so you will limit needless conversation in the future regarding your new business partner over stepping their bounds.
I know I shouldn’t need to tell people this, but even the best of us fall victim to this trap. You can take my random rant as a proverbial bitch slap, I know I did when I had to do this or you can take this as some words of wisdom from someone who had to do the same thing. No matter what, start-ups are hard and usually cause a ton of stress. Enough stress that you may or may not at times want to strangle the shit out of your business partner. This may sound like a great idea, but the jail time isn’t really worth it. That is unless your developing an app to socialize with inmates and you need a test subject.
Either way, enjoy your new found success (hopefully success and not failure) and just remember these three tenants I have found out to be entirely true.
- If you are going to do business with your friends. Choose wisely.
- Once you do business with you friends, they are not your friends in that aspect. They are your business partners, make sure that they and you realize that Business is not the same as friendship.
- Do not always think people are your friends when it comes to business. This is not true 90% of the time.
OK thats all I got for you all. Come back soon for another rant about business or coding.
Later
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