Business Partners
May 27th, 2009 by Bill
I should probably start by qualifying this post; it is going to sound downright “doom and gloomy”. The truth of the matter is that I’ve actually also had some great business partners, however they’re not much fun to write about. So I’ve picked out some of the more interesting personality traits to depict here. This list represents actual partners that I’ve encountered after 20 years of experience in 5 different venues. And by partners, I mean just that. Co-shareholders in S-Corps or LLC’s that I’ve also been a shareholder in. In some cases, the partners were simply not committed or motivated to participate while in other cases, issues with the partners went legal and cost the organizations a significant amount of money.
I once asked the renowned business man Brian P. Short how he avoided issues with his partners to which he provided a simple response: “I don’t have any”.
That being said, let me describe the personality types that I have encountered directly in my travels through the business world.
The Nelly
The Nelly or “Nervous Nelly” is the partner who lets fear of the unknown prevent themselves from reaching success. While this personality trait is not in itself dangerous, it does add drag to the effort that can impact the whole group.
The Truster
In all honesty, this is the category that I must place myself, often to my chagrin. The Truster has a tendency to put too much faith in the other partners. This can lead to complacency in areas where perhaps more diligence is required.
The Whiner
The Whiner is never satisfied even though their complaints may be unreasonable or irrelevant. The Whiner rocks the boat so often that when a real issue materializes, it goes unnoticed as yet another petty rant.
The Delegator
The Delegator is a unique partner. This individual may be very smart, or the very opposite. Regardless, this particular individual usually has a reason for delegating tasks to other partners. At times it may be because they feel “less qualified” to do the work and at other times it may be a simple “scheduling challenge”. The net result is that someone else ends up doing their work on a regular basis.
The Lemming
The Lemming does what their told, when their told, and doesn’t challenge the directives even when there may be reason to. This individual makes a dynamite employee, but not such a good partner. The Lemming is generally not self-motivated and requires significant direction in order to get any results.
Barney Rubble
Barney Rubble is generally a good person, however lacks the general common sense that causes them to be a good partner. Whether it is a matter of not working smart or simply a poor process, Barney falls into the less effective partner category.
We’ve saved the best for last. All of the previous partner categories can basically be considered more useless than actually harmful. The next two categories represent the apex predators of partnerships: The King and The Don.
The King
The King is the great benefactor of the partnership, or at least that’s what he wants his royal subjects to believe. As long as things are good, his subjects are running around happily doing his bidding, the King is generally good natured and generous. But don’t let this demeanor fool you, The King generally has a powerful position and still rules the land. When the chips are down, just remember…the Headsman works for The King.
The Don
The Don IS THE APEX predator of the partnership. The major distinction between The King and The Don is technique and approach. Both wield tremendous power, however The Don won’t hesitate to form alliances and take sanctions. The Don doesn’t always follow the rules and may straddle the ethical and legal boundary. The Don may act like your friend, but watch your back, your interests are generally NOT his top priority.
If you are planning on choosing or joining with a partner, make sure they bring something to the table in the form of financial, technical, business networking, or other valuable assets. If you must engage a partner, make sure you protect yourself legally by considering and understanding the following:
- The corporate stock distribution
- The voting power of each partner/shareholder. Is it 1 person 1 vote or weighted by stock ownership?
- How ties and stalemates are broken
- Establish and understand the terms for both voluntary and involuntary shareholder removal
- Establish and understand the corporate buy sell document
- Establish and understand the corporate buy laws
- Establish and understand any non-compete clauses that may bind you
- Each partners personal goals
- Money changes everything and everyone
And always remember that corporate counsel represents the company, not your interests. Alway, always engage your own attorney to make sure that your interests are protected.
And whatever you do, watch out for The Don!
DISCLAIMER: This post is intended as a humorous take on partnership follies. This post is NOT intended to provide legal advice or recommendations. Always check with your attorney before making any questionable or significant business decisions.