Choosing Partners: A Decision of Paramount Importance

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq., owner of Ask The Business Lawyer, is an award-winning business attorney, speaker, and Entrepreneur Magazine online contributor. She saves consulting and professional services companies time, money, and aggravation by serving as their outsourced legal counsel.

Posted on January 3, 2013 in Business Partners

OK, I’m not going to gripe and ask why I’m not on Trump University’s faculty when I see someone else blogging about business partnerships.  Psychotic.  Clearly, Randal Pinkett, PhD, is tighter with “The Donald” than I am (which is to say, I have no connection to Donald Trump unless I wanted to play 6 Degrees of Kevin Bacon, etc.); plus he’s had eight business partners among his ventures (I have only one).

But in his post, Choosing Partners: A Decision of Paramount Importance, Dr. Pinkett raises a significant point about structuring equity.  He writes: “Equity stakes should be divided based on the contributions that various partners bring to the table” — not on an arbitrary, numerical division.

Consider that when structuring your partnership deals.  Not every partner who joins the business is worth 50% of it right off the bat (or ever).  You may want to ease into ownership over time, depending on performance in various areas (work productivity, business generation, capital contribution — whatever you choose).

 

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