Your Thoughts On Business Partnership?

[Encrypted]

I noticed BuSO has no dedicated thread on business partnership (correct me if i'm wrong). So i'm starting this thread to not only seek advise for myself but also for us to share our success / horror stories ; as well as lessons learnt in business partnership.

I want this to be a learning thread for everyone.

Quick Intro :

I am a 22 years old Computer Science student at a prestigious university. I've been building websites since i was 15 although never really made money till age 18.

I've had success and made money although not at the level of some members here. Most of my success came from ranking local websites here in my country and only started competing at an international level 2 years ago.

What's your opinion ? :

Few months ago , a client brought me on board to work on his affiliate websites. He had purchased the turnkey sites for close to a year but didn't have the skills / knowledge needed to grow and make money. Before that , we had an existing relationship where i was paying for a monthly service he offered. That's how we got talking.

Along the line , we realized we had some common interests. He wanted to build a portfolio of websites making money. I was working towards the same goal. That's how the idea of partnership came about.

- He has the money , grey hat links (if needed) , organisational skills.
- I have the skills needed to build a website , SEO skills & website management skills. e.t.c

So looks like a perfect match , right?

Long story short , i declined the portfolio partnership and opted to partner on a project basis (if he accepts).

Here's why i made that decision

- I felt he was trying to tie me down to guarantee his own success by ensuring he gets involved in every site i build.
- I had my own goals and vision even before i met him and i wasn't convinced partnership is a must to get there.
- I wasn't sure if this sort of partnership / the intricacies involved will allow me to fully enjoy the freedom that comes with internet marketing. The beauty of this industry is the ability to do what you want , how you want it without been accountable to anyone. Your're accountable to yourself.
- There were some statements he made that gave me the sense he wanted a partnership not because he wants to be in one but only needed me to achieve his goals.
- I looked at the industry and realized partnership was mostly on a project basis and even so , it isn't a must for success.
- I've been in a partnership before and it wasn't a good experience.

As much as i enjoy working with him , i wasn't fully convinced it is the right decision for me and my mind wasn't at rest. Everything looks good on paper , but my guts told me to do otherwise. I did.

Now i want to ask ;

- Do you think my i'm been fair , my reasons are valid or i'm being selfish?
- What would you do if you were in my position? What will be your decision?


Share your thoughts.

 

[CCarter]

Every mega successful company was started with partners. It’s almost impossible to find a mega successful company that was started solo. I inherently believe it’s because of accountability.

I’ve has bad partners in the past - lots of them, but also great partners. It’s like dating or more-so a marriage. You have to compliment each other or fill one another’s voids. Being on the same wavelength helps tremendously. However even if you have early success and work great together bad things can happen spoiling the relationship. Mentally getting through the tough times is key.

The key to success at any level is to have goals, make sure people are held accountable and not be afraid to have honest criticism and dialog since in the end both of you are working towards the same goal. The key being you both know the goals.

Partners make you accountable. There are days you don’t feel like doing this or that, but when you got a partner depending on you it keeps your laziness in check.

I’d rather own 50% of a $100 million company versus 100% of a $1 million company. I’d rather own 25% of a $1 billion company if I got 3 other smart brains working alongside me.

However if one partner is not pulling their weight, or feels they are getting a bad deal the partnership will soon end - no matter how much money is coming in.

Also there are some problems that multiple brains working together are better at solving. Arguments will happen, fights will happen, but at the end of the day if you both set up goals and know them you know that this person on the other side is fighting so you BOTH win.

Starting a business is lonely enough - with a partner you have someone to vent and sharing problems with but also share successes.

Partnerships, like marriages or any relationships do end - they can end on bad or good terms, it’s always up to you. If it was a good partnership then they’ll want to work together in the future. If it was a bad partnership than no amount of money on the table will get you to work with that person again. I can attest to this since I was offered multiple signing bonuses for large projects and simply couldn’t bring myself to say yes cause it was a former bad partner that brought the deal - wasn’t worth it mentally.

There are some people that go into partnerships that simply want to gain an advantage: an example would be someone that thinks of only giving a small percentage and their primary goal is centered around their own winning - trying to take advantage of smaller naive partners - if that’s you then your the asshole. Stay away from a person who you feel or can’t gauge whether they have your best interest at heart. A partner talks in “we” not in “I”. And if you don’t think you have a good deal from the beginning guess what it will NEVER get better, so start from a good foundation.

After everything I’ve been through, the bad and the good, I would never start a business by myself ever again.

I’m yes on partnerships - but only if you both layout your goals, dreams, desires, and what you are looking to achieve and know what each other will be bringing to the table.

 

[Encrypted]

Every mega successful company was started with partners. It’s almost impossible to find a mega successful company that was started solo. I inherently believe it’s because of accountability.

I’ve has bad partners in the past - lots of them, but also great partners. It’s like dating or more-so a marriage. You have to compliment each other or fill one another’s voids. Being on the same wavelength helps tremendously. However even if you have early success and work great together bad things can happen spoiling the relationship. Mentally getting through the tough times is key.

The key to success at any level is to have goals, make sure people are held accountable and not be afraid to have honest criticism and dialog since in the end both of you are working towards the same goal. The key being you both know the goals.

Partners make you accountable. There are days you don’t feel like doing this or that, but when you got a partner depending on you it keeps your laziness in check.

I’d rather own 50% of a $100 million company versus 100% of a $1 million company. I’d rather own 25% of a $1 billion company if I got 3 other smart brains working alongside me.

However if one partner is not pulling their weight, or feels they are getting a bad deal the partnership will soon end - no matter how much money is coming in.

Also there are some problems that multiple brains working together are better at solving. Arguments will happen, fights will happen, but at the end of the day if you both set up goals and know them you know that this person on the other side is fighting so you BOTH win.

Starting a business is lonely enough - with a partner you have someone to vent and sharing problems with but also share successes.

Partnerships, like marriages or any relationships do end - they can end on bad or good terms, it’s always up to you. If it was a good partnership then they’ll want to work together in the future. If it was a bad partnership than no amount of money on the table will get you to work with that person again. I can attest to this since I was offered multiple signing bonuses for large projects and simply couldn’t bring myself to say yes cause it was a former bad partner that brought the deal - wasn’t worth it mentally.

There are some people that go into partnerships that simply want to gain an advantage: an example would be someone that thinks of only giving a small percentage and their primary goal is centered around their own winning - trying to take advantage of smaller naive partners - if that’s you then your the asshole. Stay away from a person who you feel or can’t gauge whether they have your best interest at heart. A partner talks in “we” not in “I”. And if you don’t think you have a good deal from the beginning guess what it will NEVER get better, so start from a good foundation.

After everything I’ve been through, the bad and the good, I would never start a business by myself ever again.

I’m yes on partnerships - but only if you both layout your goals, dreams, desires, and what you are looking to achieve and know what each other will be bringing to the table.

I agree with your thoughts that partnership is the way to go if both partners are genuine they have both interest at heart.

I'll like to hear your thoughts on my situation and what you think and will do.

At the start , I was very excited when he suggested partnership and was willing to agree but along the line , there were some statements he made that got me curious about his intentions and why he wants a partnership.

For instance , him wanting to structure the partnership to get a higher % / benefits because he lives in an expensive country and i live in a less expensive place. I've never heard of this before.

Also , sometimes , he's not straight forward with words and you have to be smart / read his text a couple of times to understand the point he's driving at.

 

[CCarter]

For instance , him wanting to structure the partnership to get a higher % / benefits because he lives in an expensive country and i live in a less expensive place. I've never heard of this before.

There you got - one person already feeling like they are getting a bad deal, partnership is over. He’s looking for ways to take advantage of you versus both of you winning together.

If he’s not straight with his word he is trying to fuck you over and isn’t genuine. It may not happen for years but it will eventually happen. He doesn’t see you as equals, more-so a free potential employee to help his own fortune. He doesn’t respect you to be blunt.

I’d tell him to fuck off. The headaches and obstacles you will come across will not be worth it. 50/50 or nothing.

Also a key to seeing if he is genuine is always down to documentation and having full access to everything - bank accounts, corp paperwork is in order and in both your names etc; There are certain things you shouldn’t have to ask.

You know that feeling when someone is trying to take advantage of you - from what you wrote and HOW you wrote it, it’s clear he is.

 

[bernard]

Regarding the split, I had a business partner in a "poor" country once, and we split 50-50, obviously. I'd say that is a red flag imo. You go in as equals.

 

[Ryuzaki]

There were some statements he made that gave me the sense he wanted a partnership not because he wants to be in one but only needed me to achieve his goals.

This is the entire point of partnerships. You need each other to succeed, so you team up. I don't see a problem with anything that implies that that is the case.

For instance , him wanting to structure the partnership to get a higher % / benefits because he lives in an expensive country and i live in a less expensive place. I've never heard of this before.

Yeah, that's a complete no-go. That's an inequality of outcome according to his needs, not according to what he puts in. I'd take that as a sign that he will attempt to get that eventually, because he already feels entitled to it. I wouldn't let him be in control of the money if I did go into that partnership. I wouldn't go into it anyways. He already has a poisonous mind state that has nothing to do with capitalism and business.

Also, what always seems to need to be mentioned is to get everything on paper, signed by both parties and dated, as well as with a witness. If there's no contract, there's no partnership, there's a disaster waiting to happen.

 

[Encrypted]

This is the entire point of partnerships. You need each other to succeed, so you team up. I don't see a problem with anything that implies that that is the case.



Yeah, that's a complete no-go. That's an inequality of outcome according to his needs, not according to what he puts in. I'd take that as a sign that he will attempt to get that eventually, because he already feels entitled to it. I wouldn't let him be in control of the money if I did go into that partnership. I wouldn't go into it anyways. He already has a poisonous mind state that has nothing to do with capitalism and business.

Also, what always seems to need to be mentioned is to get everything on paper, signed by both parties and dated, as well as with a witness. If there's no contract, there's no partnership, there's a disaster waiting to happen.

THIS !!! I learnt the hard way!!

I had a terrible experience few years ago. See my next comment below.

CARRYING A DEAD WEIGHT :

My first business partnership was in 2013. I joined a group of 3 others to co-found an Android focused website (think androidcentral.com) for my country.

The Android Operating system was exploding at that time. New brands were springing up and there was a huge opportunity for us in my country. We were first movers.

I was 17. Young and naive , but passionate and full of energy. It was my first partnership and i had no experience. I just wanted to build something.

We had an agreement that 3 of us would write the content while the 4th member will handle server and all technicalities.

Our first year of partnership was great!. Everything was smooth and we were all actively involved. Then , all of a sudden , 2 of the partners (writers) stopped active participation. They were still part of the team but their efforts dropped drastically.

Now considering the site requires frequent posting , i had to do extra work to cover up for our inactive members. So i did my work + the work of 2 others. It was crazy!!

And you know what's more crazy ? We all shared profits equally. The inactive members got equal share as me.

It continued like that (although one member left at some point) for 2 years until mid 2015 when i couldn't take it anymore. I voiced out and we had a fallout. I was pushed out of the team and locked out of all accounts.

Then it dawned on me!!

WE HAD NO CONTRACT OR OFFICIAL AGREEMENT !!.

Which means i had no share in the business the moment i was out

How could i have been so stupid for 3 good years?

I was sad. It was painful. But i forgave myself , learnt my lessons and moved on.

What i learnt :

- Always have a legally binding agreement before going into any business partnership. A gentleman's handshake agreement is not enough.

- Don't carry dead weights in a partnership. If a partner is not giving the required efforts and doesn't have an indisputable reason why , please walk out of the partnership or change the structure.

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DAYLIGHT ROBBERY :



This wasn't a partnership but it was a close call. Damn too close!.

In August 2016 , during holidays after my first year at university , i got an offer to work at a startup in my country. They were in need of an SEO and i was looking for corporate work experience for the 2 months holiday. That's how i got to work for them.

I left in September 2016 and made a huge impact in my 2 months there (i actually helped them double their monthly traffic) so they liked me and ideally , we kept in touch even while i was back at school.

Then the christmas holiday came and i was back in town. We met again and continued our discussion. I told them of one of my sites that was exploding in traffic and made $5k in a single day during the 2016 black Friday.

They were hooked and made me an offer to invest 5 million naira (convert to dollars for better understanding) into the website while offering me 500,000 naira (personal cash) + a 5% stake in their company vested over 5 years. They made everything look like they had my best interest at heart. I was stupid and naive.

Now everything looked good and i even went ahead to sign their letter of intent but after discussing with my family and then girlfriend , i realized how stupid i was and it was nothing but daylight robbery.

1) They wanted 70% of the business for them and 30% for me but made it seem like i still have control of the business.

How ?

The startup was owned by 3 founders and instead of making it clear they're investing as 3 separate individuals , they tried to mask under the shadow of investing as a "Startup" based on our discussions where as in the letter of intent , they stated each individual would have 23.3% , while i have 30%.

So while theoretically , i still have control , their combined power would push me out whenever they want. It was sneeky and very clever.

No one with your company / interest in consideration tries to come in and take 70% in form of an investment. NO ONE!

2) They gave me 5% of their startup vested over 5 years which means i must stay 5 years with them before i get the 5%.

Considering their initial plan to smartly take control of my website , there's no way i was going to be with them for 5 years.

Besides , they were a struggling startup that wasn't looking like they'll survive for long , so the 5% wasn't even worth much. Last time i checked , they've folded up and their site looks like a ghost town.

Long story short , i got a lawyer to cancel whatever arrangement we had and immediately blocked them from any form of communication with me.

Although i'm still young , I'm a lot clever now and no one can trick me into a partnership. EVER!

I've definately learnt things the hard way.

 

[Andrewkar]

They were in need of an SEO and i was looking for corporate work experience for the 2 months holiday. That's how i got to work for them.

Hehe, well don't take my lough the wrong way, but I was there as well, a couple of times actually. Some people who have "some" idea about about online marketing and profits it can generate, think that people who are doing SEO are just stupid nerds that were born just to be exploited. But this is the way it works, we can't change it, and we should not. The good thing is that the guys who are actually doing a good SEO job are aware of this situation, and know how to take advantage of it. I mean even in a bad looking business relationship they can actually force sloppy partners to complay with their demands, taking into account that the guys who are responsible for SEO are often lifeblood of a business operation....... They have a lot to say, and evetualy do...

I would say, even if you see a bad relationship on the horizon, that's not always a good enough reason to stay away. Sometimes it's well worth it to enter a bad prospecting partnership, but with a clear goal in mind of making only yourself some good. If you think someone is trying to f*** you up, don't leave the table too fast... Maybe there is an opportunity for you at the end of the day. You just must think a few steps ahead and see what those people are really about. Most people who will try to f*** you over are the ones you woudn't like to work with long term anyway, so if they are a scum treat them like a scam. Who knows, maybe you could get some nice easy money from businesses like this?

Sure it's perfect if a great partner (or even better - partners) will cross a way, that a chance for something big, real and joyful. But from my experiance it happens not very often. At the end of the day we should be preoared for a f***up anyway. I got myself involved in two "bad" business relationships during last year, but still both of them tourned out to be lucrative to me (both in knowledge and money). I was the one responsible for SEO, and I took on myself a great deal of work while those bastards were only waiting for profits and doing almost nothing..., and once they decided to expose their true colors I took my hard earned $ and goodbye them in a blink eye. My share in both cases was only 20%, but once money started comming in they decided to make it a crazy 8% And I knew it's going to happen since almost first day of our cooperation, I could almost feel it.

Anyways, it was a profitable business to ME, in both cases fortunately.