Christopher Scudero, Senior Manager, Advisory Services, Quoted in The Grindstone Article "10 Lessons From Entrepreneurs Who Started Businesses With Friends — And Failed" By Lindsay Cross
Christopher Scudero, Senior Manager, Advisory Services, was quoted in The Grindstone article “10 Lessons From Entrepreneurs Who Started Businesses With Friends — And Failed.”
The following is an excerpt from the article:
Initial agreements are like pre-nups, they protect both parties.
Christopher Scudero stepped in to let us know how business partners can avoid these messy situations. He put these tricky decisions in terms that almost everyone can understand. After all, business partnership is a lot like marriage. “What usually happens is two friends have a great idea and they decide to go into business together.They usually don’t have a lot of money, so they either skip getting attorneys involved to draft up the usual agreements, or they get someone really cheap and tell them to spend as little time as possible so the fees don’t get run up.They figure that they are great friends and they will work things out as they go along.Look at it like a young couple getting married.Why should they get a prenup?They’re in love.They’ll never be one of those couples that split up.So the initial agreement is usually pretty poorly put together.It won’t lay out and memorialize the expectations the partners have of each other.It also won’t usually deal with what would happen in a dissolution (omits what price one party can buy the other out for) or even just in the case of a dispute that can’t be settled (trying arbitration before litigation).”
Sweat the small stuff.
And you don’t just have to prepare yourself financially. Scudero says that partners need to have realistic emotional expectations as well. “As to relationship dynamics, take whatever minor differences you have and multiply them by 10.Again, very similar to marriage.Startup businesses are stressful.That stress exponentially increases whatever underlying problems exist between people.”