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New business partner and having second thoughts

I started my own design and marketing business over 7 years ago. I have been a 1 woman band ever since and it has been more than successful, which I am really proud of!

In order to enhance and grow my business even more, I decided to get a business partner that evidently has social media skills as well as websites and coding. Another huge advantage is the fact that she has many high-end contacts that she could use to her advantage.

After many discussions, we agreed that I was to sign over 50% of my business to her which she will “pay” for in a means of reaching set targets to grow the business within a year.

We are 2 weeks in and already have PLENTY of disagreements and she also has not gotten in contact with any of her business contacts as discussed.

Our partnership agreement has not yet been signed as there was a very long delay on her end as well as she gave a 3 month notice at her previous job and also told me she was going away for 2 weeks before starting to do business with me.

I am so worried that I am making a mistake and that this new partner is going to ruin my existing business!

  • This is one of those cases where you only go through with it when you’re 100% certain it’s the right thing to do. You have much more to lose here than she does.

    Those high-end contracts will probably not materialize. Contacts are worth next to nothing. Social media skills you can learn yourself or outsource cheaply while you figure out what kind of social media work makes a measurable impact. If you’ve survived (and thrived) for 7 years without website/coding expertise it’s clearly not vital to your business. It sounds like you’re giving up 50% of your business in exchange for drama and lofty promises.

    You already know that this partnership was a big mistake. That’s why you’re posting here. Now you just have to break up. Painful and awkward, but it has to be done. No sense in dragging it out or punishing yourself over it any longer.

    Reply

  • Use the slicing pie method. Handing over 50% against just some promises is nonsense. – And if you have a bad feeling already now, then (regardless of the exact wording of the agreement), you are probably a bad match.

    Reply

  • Stop! Don’t give away 50% of your business. Hire a worker on a part-time basis, and let them prove themselves. If they are really good, they will pay for themselves and you will be able to give them more work/hours.

    Also, don’t think of just social media. Think of holistic marketing/sales area.

    Reply

  • I’m with everyone else. Hire someone to do the same work, without signing over 50% of a 7 year old company. That’s just crazy.

    Also, in the two weeks that you’ve had “PLENTY of disagreements”, did you come to any resolutions? Do you have a way to resolve issues? If things don’t materialize within a year, does she still own 50% of your business? Like every business guru says, a business partnership is like a marriage.

    If anything, I wish I could see your partnership agreement on paper.

    Reply

    • Dear,

      I am an investor from United State based in France, I am willing to invest privately owned funds in your business project as equity or loan financing, Are you an entrepreneur at start up stage, early stage, seed stage and so on, seeking to raise capital? I have the financial resources and experience to raise capital and fund any business project as equity or debt financing. If you are a capital seeker and you are interested, do email your executive summary or business plan to me for review and negotiations. 

      Regards,Allen Willie

      Your funding need (Angel investor)

      email: aawillie01@gmail.com

      Reply

  • You probably aren’t drawing a personal salary because you are keeping whatever is leftover after your basic expenses. So, giving away 50% of the “equity” is essentially giving away 50% of your income. Equity entitles the owner to a share of the profits, AFTER salaries and all other expenses have been paid.

    That’s problem 1

    The other problem is that 50% is a random number and is not fair. As mentioned in another post, be sure to check out the Slicing Pie model (www.slicingpie.com) in order to ensure a fair split. It will not only give you and her fair %, but also tell you how to handle a separation.

    Reply

  • I can relate to that, since I’m also a one guy business in growth stage, so I’m desperately looking for a partner in order to help growth and divide the workload. That’s to say that I’m willing to give 50%, provided that person won’t change the essence of the business (it is related with consultancy, so it’s my reputation on the line) and it has to bring effective business in.

    That is to say, before the 50% share of the business, the new partner has to prove himself by sharing first 50% of the profits over the accounts he/she actually brings in.

    Reply

  • Seriously, people giving away 50% of the company they spent years building to someone who’s not had a single day of prior input? Do you really value your effort so little that it’s the equivalent of them having done NOTHING so far?

    If you want someone to bring in sales then hire a sales person – don’t give away equity for nothing!!!

    People will be your best friend in every conversation that involves them getting equity – give it only for results and where you can’t buy the same talent as an employee.

    Reply

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