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How should I respond to a partner not contributing as much as they should?

My business partner and I started our business out of university last year. Eight months later and three months prior to launch he has gone travelling. It was discussed that this might be an option once we launched but not prior to launch. He has gone traveling for four months. With us both having equal equity stakes and an equal investment into the business, what should I do? I don’t want to be taken for granted and work my ass off whilst he’s away sunning himself. Because this is my first business I don’t have the confidence to go it alone, I know I could but I wouldn’t want to.

  • You should have drawn up a contract with clauses that remove his equity if he doesn’t contribute a certain amount of time and effort to the business. Since you didn’t do that, you’re screwed. You have two options:

    1) Let him keep relaxing while you work hard and he still keeps 50% of the business.

    2) Dissolve or leave the company and start a new one. You can let him fend for himself and get a new co-founder if you don’t think that you can do it alone, except this time make sure to get a contract drawn up.

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    • It’s safe to assume that because there wasn’t a clause enforcing a minimum amount of involvement/work that there isn’t a non-compete clause either… #2 might work – but that’s only if you’re a complete douche… CALL YOUR PARTNER AND TALK TO HIM.

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        • This only works if the partner is willing to listen. I’m scouring my partnership agreement right now to see how I can force my partner out.

          We have a pretty tight knit agreement, and had it signed long before we went into our partnership.
          I’ve had several “coming to jesus” talks with him regarding his work ethic. Last Monday he said he couldn’t “handle working 40 hours a week and only getting paid for 20.”

          It’s not douchey to want to get what you worked so hard for. I think he’s under the impression that he’ll get 20% of the profits without having to do anything of the work. Despite me specifically saying in November (2016) that if I’m the one picking up the slack, and I’m the one in charge of the finances, when it comes down to him getting his 20% equity – 20% of nothing is still nothing. I blatantly told him to get his act together, or I’ll just spend an extra $1000 on marketing so the profit at the end of the month is minimal.

          Too far in, and growing too much to dissolve and start over at this point.

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  • I’ve learned this the hard way but you should have an Operating Agreement in place which would speak to some of these things otherwise you’re at the whim of their kindness. Good luck, it sucks.

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  • You should leave
    1. if he doesn’t care about the launch now, he’s not going to care about the company later. Its inconceivable that he has to travel for 4 months. And you should probably have launched before he left or not planned to launch until after he returned. Eithere way it doesn’t make any sense.
    2. If you are not comfortable confronting him about this- or he doesn’t care about you- you are not a good team.
    3. He didn’t invite you to go traveling with him- and you call him partner?

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  • I think you are approaching this problem in a wrong way,

    First I would ask my self why did I make a partnership with him, it was because we where friends or because he has some skills that I do not have?

    If the answer for you first question is “YES” and for the second “NO”, I think you should pack your things terminate the partnership and start on your own. You do not have to stand for that kind of crap.

    But if the answer to the second question is also “YES”, I think you must make a list of the things that you expect from him, I mean, RESULTS, measure his commitment by the amount of IMPORTANT RESULTS he delivers, not by the amount of effort he puts into acquiring those results.

    I know I will always prefer to work with a lazy guy that delivers results, WORK SMART, NOT HARD.

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  • Thank you for all your opinions. However, the options 1&2 are very drastic decisions. What would people think to a higher equity stake for my half, with an option for him to get SOME of that equity back in return for certain milestones.

    Regarding inviting me, I didn’t have the funds to go. So that was that!

    I’m not going to dissolve the company or get a new partner as I need a friend to do my first venture with. I admit that communication is key. I did vent my frustrations to him going away but have no offered a solution to this. If the solution was an increased equity for myself, what should I ask?

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  • What exactly is your grouse? That he went away w/o sharing the burden or that you cannot get the thing started on your own?

    Harsh as it may seem, the first one is an excuse if your passion had driven you to start this business. If you can mange to start it – may be with some help from some one else temporarily, until it is launched go ahead, seek the help and get going. Later when your vacationing partner comes back you can cite the agreement not to take vacations before launching the business and negotiate a lesser share in the business.

    In my experience trust and competence are equally important among a start up owners. tbh, i dont which is more important.

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  • I have gained so much by reading these comments. I am considering going into business with a friend. A week into the hard work, she decides to ignore all business related emails and respond to everything else that I’ve sent her (social and work related) She really understands my vision. I guess that is why I want to work with her. I just dont trust that she will be committed to this venture at all times. A contractual agreement detailing our expectations of this partnership sounds like a plan but there is a part of me that is telling me to cut her off completely before its too late. I think I know what to do now after reading these comments. Thanks!

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  • I’m in a similar situation.

    — 2nd generation family business

    — owned and operated by 3 brothers for 20+ years

    — construction department is run jointly by brothers 1&2

    — maintenance department is run by myself

    — over the last 10 years I expanded maintenance department 3x and now produce 70% of total income.

    — Compensation between brothers has always been equal.

    Time for a change I think but we all see it differently. If we can’t come to some agreement I’m afraid the business will need to be split up.

    Family makes it all the more difficult.

    We plan on seeing a family business consultant.

    Does anyone have experience with something similar.

    Thanks

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