Monday, August 4, 2014

A Rational Approach for Entrepreneur Partners

Kate Minshew and Alex Cavoulacos
Things don’t always go smoothly when four work colleagues decide to start a company. That’s why those colleagues should hire a lawyer to hammer out an agreement that will describe clear steps for resolving conflicts that might arise. That’s no fun at all — except when you compare it to the alternative.

Simply put, the participants were fighting with the ferocity of bottled scorpions over the spoils of their year-old startup despite the complete absence of any spoils — except for the possibility of avoiding lawsuits financed by the offspring of one of the world’s leading automobile executives.
Reference: A Cautionary Tale: Friendship, Business Ethics, and Bad Breakups (Acts I and II), by Peter Cohan.

A Rational View and Approach

There are fundamental steps to take first, well before engaging a lawyer to hammer out an agreement among would-be entrepreneurs.  It's a matter of talking through what it means for you and your partners to launch a business, that is, personally.  It's putting your thoughts and aims, excitement and fears, if any, on the table.  It's inquiring openly about what you expect from each other and responding honestly and constructively to these expectations.  None of this psychology stuff may be compelling to entrepreneurs hell-bent on a business idea, but these are critical for their ultimate success.  You may need an experienced coach, adviser or mentor to facilitate this process.  But once sufficiently undertaken, you can bring in a lawyer to formalize via obtuse legalese language a deeper, more elemental agreement that you and your partners have forged.

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