How to make sure a partner in a business idea won´t turn against you?
Asked by
robdamel (
791
)
September 16th, 2011
There is a certain entrepreneur who wants to invest in my business idea. He has the money and I have the ideas. However, he is also smart enough to turn on me later when things start going well. I am sure this is a common fear between entrepreneurs who come together.
First, I would have to clarify that although I know this man little, we have developed a small friendship over a period of three months. He seems to be a person of good faith, and we have a lot in common. But I must admit that I don’t know him enough, and even the devil can smile.
How would I go about making sure this man won’t run off with my idea the moment I give him details?
How do I make sure this man won’t throw me off later down the road?
Are there contracts to sign of any kind?
Are there any tests I should do to test his loyalty?
All suggestions relevant to business start-up are welcome.
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7 Answers
Talk to a business attorney about a partnership agreement.
Partnerships are always one of the riskiest types of business arrangement, but obviously they are sometimes necessary just to get the thing off the ground. You need capital to start to implement your great idea, and your likely / potential partner has cash looking for a great idea.
@CWOTUS What will a business attorney do?
@robdamel He will draw up a partnership agreement that protects the rights of both parties.
I have to tell you that my own experience with partnerships is very bad. I would neither do it again nor recommend it.
I would let the guy invest some money in your idea, but not go into business with him.
A business attorney can help you draft a partnership agreement that protects your business idea and still is attractive enough to get a partner to help fund your idea.
He may also give you creative ideas for incorporation prior to (or after) forming the partnership, or as @marinelife says, suggest ways for you to maintain complete control of “the business”, yet be workable for a silent partner – who certainly wants to protect his investment as much as you want to protect your idea.
My husband has had very successful business partnerships and his current one is wonderful. I wouldn’t dismiss it out of hand but you do definitely need to have a contract spelling out the agreement and giving you protection such as a non-compete clause if the partnership breaks up.
Thanks guys, all answers appreciated. Almost all, hehe.
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