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Partner Conflict with Sales/BD Guy

I was the sole founder and ran the company for 3 years. The business model was definitely not sustainable since we were a tech team, I decided to forfeit 45% of my shares and take in a partner whose job would be sales and BD.

It’s been 5 months now, except one small project no new project has come in. The guy is very unprofessional in office, recently planning long trips with his wife and friends during office hours in front of employees. He also wants to take out a salary to fund said trip. At the moment me and him don’t take a salary, but his basic expenses are covered by the company.

I have no problems taking out a salary as long as there’s money in the account. But I don’t see the surplus money and I refuse to look at the 2-3 projects in the lead pipeline because I can’t possibly know if all these leads will convert into a paying customer.

I have not signed the share transfer agreement yet. I do understand that conflicts arise in a partnership but I don’t see the value. The guy talks a lot but I have yet to see anything quantifiable from him.

I am a techie and do not have any sales or BD exposure. Does BD take this much time? Do I work through the partnership or do I walk away?

  • Sales is about the process. If you don’t follow the process (at least loosely), you won’t see the results.

    Don’t look at the numbers in the pipeline. It is very easy to fake. Depending on the deal size, type of solution, 5 months is not a short time. Most mature companies will give you 6 months for ramp up. Leaders should ramp up much more quickly.

    See how well he is engaged with the customers, how much trust/influence/rapport, he has. If he does not have these intangibles, the deals won’t close. If he has the relationship with customer, check if they really have the need, budget, timing, authority to close.

    I have hired 3 sales people, and not easy to hire good ones. From what you are saying, they seem to be like my worst one.

    Reply

  • “planning long trips with his wife and friends during office hours in front of employees. He also wants to take out a salary to fund said trip”

    That’s the clear clue. Asking for salary to cover living while working is one thing. Planning a short trip to avoid burnout while working hard is OK too. A long trip (not good, so soon, in a startup), funded by the company (not OK when there isn’t ample money), in front of employees (who, assuming, aren’t taking long trips themselves just now) = red flags waving.

    Reply

  • How is it that you took in this BD Guy under the agreement that they would receive 45% of your shares, yet you haven’t signed the share transfer agreement yet…

    Is that normal?

    Reply

  • 45% seems really high if you already have a product built and paying customers. If you have no customers, why did you build a solution? You can’t possibly build anything without having some sort of market feedback.

    Second, nobody earns 100% of their equity in a lump sum. You need to have a standard vesting schedule – 1 year cliff, 4 years to earn whole thing. That way if the dude sucks you can fire him without giving away your company.

    Third, sales can take a long time depending on vertical and segment. If you’re trying to sell a product that will cost $100K a year, that’s a large contract and could take several months. Further, the market might need to be educated on your solution in general… I think of local merchants being just about the most unsophisticated groups of customers out there. These guys don’t even use excel, so if you’ve got some software tool that will help their business you’re going to first need to teach them that they have a problem. This takes a long time.

    Lastly, there’s obviously a huge cultural misalignment. If you are both working to make the company work and this jerk off just goes on vacation like it’s a 9-5 gig he is nothing more than an employee, not a founder-type. Go look for a founder caliber hire.

    Reply
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