Running away at the alter... Business Partnership Cold Feet

[GuestUserX09]

I understand the forum can't make decisions for me but I'd like to hear experiences from those who have considered to begin a partnership and chose not to, or similar.

So.. I met with my to-be business partner tonight along with a trusted friend/advisor. We were grabbing dinner and the to-be business partner also brought a friend. I had the paperwork in my bag ready to go. I was about to sign away 40% of my business. I got cold feet and told him I left the papers at home. We will meet tomorrow morning. Between now and then, I will explain why I am considering pulling out.

Some background on the to-be partner:
- 4 years younger than me (18)
- No college
- No entrepreneurial experience
- No capital

Why I am even considering:
- I don't know anyone personally who is as positive/optimistic/thick-skinned as him
- He actually reads the books I recommend, fairly quickly
- He has always had hustle ambitions, I've known him for several years
- After a recent college failure experience similar to mine, he's pledging a new born hustle
- I am in need of help asap. The business is overwhelming on my own.

My alternatives:
- Hire someone local on hourly wage to help out.
- Stop kidding myself, stretch further and hustle overtime.

For those who have partnered or almost partnered, what were some key points that made you appreciate or regret the decision? I have asked around in PM's over the last couple of months but I could use some last minute thoughts.

 

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[BlakeIC]

Have you made a single $?

I just read your other thread regarding the Porsche

Have you successfully lined anything up from any pitches?

What parts of your business are overwhelming that you can't do yourself?

edit: to me he sounds like an employee, which at that point I wouldn't feel comfortable giving 40% away because they do the tasks of an employeee

 

[Mr4213]

Determine the value you see him bringing to the table.

Don't sign anything without having worked with each other a little bit.

Give him a trial. If he produces results and it's a good working relationship sign.

 

[juan917]

Well..why the 40%? Can't you just make it a lot lower based on your negatives.

 

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[GuestUserX09]

Have you made a single $?

Have you successfully lined anything up from any pitches?

What parts of your business are overwhelming that you can't do yourself?

edit: to me he sounds like an employee

The site is live but I haven't started selling it so much besides some A/B ad testing and collecting user feedback. I've invested a few thousand into the product and marketing so far.

No pitches set but I did VERY thorough product validation for individuals and some local business owners. I've sold much less valuable products to businesses in the past for work so I'm confident in moving this along. We're pitching it for free now anyways though which will definitely help.

He's very passionate about his "turnaround" and wanted to get IN and not just be an employee, but yes, that would be ideal.

The overwhelming parts are that these are mostly local efforts as far as visiting businesses and making personal connections to set appointments. The online marketing itself takes a large piece of the day. Overall, it find it very comforting to have someone else in the rotation of things.

 

[juan917]

The site it live but I haven't started selling it so much besides some A/B ad testing and collecting user feedback. I've invested a few thousand into the product and marketing so far.

No pitches set but I did VERY thorough product validation for individuals and some local business owners. I've sold much less valuable products to businesses in the past for work so I'm confident in moving this along. We're pitching it for free now anyways though which will definitely help.

He's very passionate about his "turnaround" and wanted to get IN and not just be an employee, but yes, that would be ideal.

The overwhelming parts are that these are mostly local efforts as far as visiting businesses and making personal connections to set appointments. The online marketing itself takes a large piece of the day. Overall, it find it very comforting to have someone else in the rotation of things.

I'd say do 10% instead of the 40. 40 is excessive

Make opportunity for more if he performs well..

 

[GuestUserX09]

Well..why the 40%? Can't you just make it a lot lower based on your negatives.

It's 40% or nothing in his mind. BUT the contract has an mandatory re-negotiation date by the end of the year, so it is technically a trial, I could axe it there as well. Thing is, we could start making some real money in that time and the real cost to be would be variable based on that. Sorry, that above is important info I left out.

 

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[GuestUserX09]

I'd say do 10% instead of the 40. 40 is excessive

Make opportunity for more if he performs well..

I'll explain where I stand and say closer to 20% OR hourly wage employee or nothing.

The product isn't yet profitable and he wanted 40% since he's investing time with no guarantee of any pay.

 

[juan917]

You already have the product done. Why should he even get any ownership?? Esp if he didn't even come up with the idea. What exactly is he bringing the table other than telling you "I'm gonna work really hard brah". Your delivering experience to him, you have the upper hand in every aspect, how is 40% even a consideration?

If he has no track record of success he should prove himself, now if he does something like get you 10 customers and revenue in a week. Then yes give it him

The dude is 18 I am sure his parents are covering his living costs, he doesn't need the pay he needs the experience.

 

[The-J]

I had a similar situation. Hope you can see any parallels.

I was going to start a business with a good friend when I was 19. He came up with the idea, and I told him how we would market it, I got on the phone with manufacturers, etc, and we would each put up half of any start-up capital.

I ultimately decided not to do it. I explained to him why, and he agreed it was for the best. I told him that if he wanted to go do the business on his own, he could, and that I would not be doing it myself.

He's a smart guy, hard-working, but he had other priorities at the time. For him, starting a business would be a bit silly, as his goal was to get into law school.

I'm very (VERY) glad I did not get into partnership with him. There, of course, is a universe timeline (for all you geeks out there) in which we do decide to do it, and I sometimes wonder... what if? But I'm glad we did not.

 

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[GuestUserX09]

@juan917 I didn't really come to the realization until now but I think I wanted him there for insurance/reassurance. I definitely need a local to hustle with me but I could only afford to pay him minimum wage. In his eyes 40% would be like the lottery, although we haven't made anything yet.

Basically, I want to hire an employee but with equity. I've invested enough that I felt it was necessary to involve paperwork moving forward.

Honestly, I'm thinking to just hustle harder and make it happen on my own locally. I work on this only and probably utilize only 70% of my awake hours. I may also need a day job in the next couple months since my existing capital/cash is getting low, which would cut severely into my time.

 

[GuestUserX09]

@The-J Thanks for sharing this. I do see some parallels.

The partner has no priorities, but a part-time job. I have no priorities. It seems like a proper time.

I see you took action though right off the bat that showed commitment.

I'm mostly so confused by the fact I already spent the hours and cash to build this thing. It would have been ideal to partner in the idea phase.

 

[The-J]

I'm mostly so confused by the fact I already spend time hours and cash to build this thing. It would have been ideal to partner in the idea phase.

We spent hours and cash together, formulating the product, getting some designs for the packaging, coming up with ways we would get it out there. I still walked away.

Sunk costs, man.

 

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[SmittyMcdougal]

If you want a hustler, go find a proven hustler off the streets, go to your local car dealership, cell phone store or real estate guru and offer them 40%.

Without knowing the product i would throw down the time to hustle if i knew there was a 40% rate of return. I would imagine half of this forum would do the same.

 

[Deleted35442]

@The-J Thanks for sharing this. I do see some parallels.

The partner has no priorities, but a part-time job. I have no priorities. It seems like a proper time.

I see you took action though right off the bat that showed commitment.

I'm mostly so confused by the fact I already spent the hours and cash to build this thing. It would have been ideal to partner in the idea phase.

He's putting in his time with no pay. 40% is an obscene amount to hand over to someone. He should honestly be happy with 5%. There's no sense handing over that much because if you're not making money I don't know what it is you're actually doing. He's 18 and is putting nothing else in it. I think you've answered your own question. If he's not making you money, he's not justifying anything. Go cruise angel.co to easily find more qualified people.

 

[GuestUserX09]

I think you've answered your own question

Agreed here. I'm breathing heavy thinking I also signed that just a few hours ago.

I'm going to slow it up and really asses how I'll handle the time management flow of things here.

 

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