How do you successfully bring partners into your business?
We are innovating and adding some partners and products for our 5 year Anniversary. I am bringing in some partners who are experts in different categories. I am not sure how to create aggreements and create momentum. I can use some help in keeping everyone working effectively.
Do you want partners? (because you need capital) Maybe what you want is an advisory board? (you need expertise but don't want to split up ownership). You need a business attorney to work with you, pulling documents in this case will cause you to miss out on a huge discovery process of attorney's being able to add value to this process and get you to where you really want to go.
Crystallising the elements into an agreement is easy enough, AFTER the elements have been discussed and agreed .... that's the challenge for you as you initiate bringing them all on board ....
Ask yourself what you would need to know to accept a Partnership - and then answer each Q in 3 different ways to yourself and you may have a checklist to work with.
The most difficult part of structuring any "partnership" is of violating the "equality" associated with Partnership - after is a 90:10 association a "partnership" ? While that's probably what you have in mind ....
I personally don't like to use the terms "partnership" at all so that we can discuss ownership stakes freely without the baggage of implications.
Everything suggested below is excellent-----Would add that with your partners TRUST is BUILT and expectations are understood....
If they are purchasing partnership interests or other equity, you should have each execute a subscription agreement pursuant to which they purchase the partnership interests or other equity.
You can get business agreements: https://www.legalnature.com/legal-documents and a free partnership agreement here: https://www.legalnature.com/categories/partnership-agreement
One you complete it, give it to your attorney for review. This helps you identity issues that are important in agreements.
A also agree with Jerry that a well thought out professionally prepared agreement is essential. The things he mentions such as what happens when someone wants out is one of the most critical elements. I would also think long and hard about going that direction at all. Partnerships are one of the most difficult forms of business and those that are most likely to fail. Usually it is problems between the partners and differences in how things should be done that cause these problems. Money can be borrowed and experts in any field can be hired. Do you really need partners?
I agree with Jerry - before you do anything, get an agreement in writing with EVERYTHING detailed. It seems tedious, but you will be grateful for it later.
Melissa, it is essential to have a good agreement drafted by an attorney. The agreement should detail the roles and expectations of each partner, how decisions are to be made, what happens when there is a conflict, what happens when a partner wants to leave the business, what happens if a partner dies, what happens when a partner refuses to add needed capital and other issues. The time to draft and agree to this document is now - before the events occur. When problems arise, it will be very difficult to resolve differences of opinion. If funds are a concern, remember that attorneys can make a lot more money helping clients work out of a problem, either in litigation or in negotiations, then we ever could by drafting a good agreement at the outset.