In many states statutes provide for the “presumptive” partnership where even a discussion about entering a business together with someone can make one a ‘presumptive partner’ [if it looks like a duck, quacks like a duck, it’s a duck] and thereby mutually liable for the acts and transaction of your presumptive partners. Talk is not always cheap.

That said, there is no question that well thought out mutually beneficial business relationships can, and do, provide leverage and competitive advantages.

My advise, always clearly codify in writing/email all the intentions of all discussion leading up to any potential business relationship.

Be clear what you are and what you are not!

As an idea guy I know the importance (from a long series of failures) of adding the right people to the mix to support my vision. I guess ultimately a little luck goes a long way too:)

In your example Dave, without that partner, even though it did not work out in the long term for that record company play, it did give you some short term success that, it might argued, setup your long term success.

michael

I’m surprised that you interpreted this situation as evidence of the calamity of bringing on a business partner.

Many businesses cannot survive in today’s entrepreneurial environment without a team. Indeed, most investors, not unlike yourself, will dismiss investment opportunities where the team slide of the investment deck consists of one photo and a single brief bio.

I interpret your story as proof of the need for communication and written (and signed) clarity in the partnership expectations. As you mentioned, there wasn’t a partnership agreement. But a lack of an agreement doesn’t diminish the value of a business partnership any more than a receipt-less transaction at a swap meet devalues the ad hoc marketplace itself or the goods and services offered at such events.

A “company” consists of several people who exhibit these shared qualities and who are linked together through shared values, agreement and contract.

One of the major failings of entrepreneurs is their inability to partner and to know how to select a partner – being it a consultant, an advisor, board member, service provider, business partner or down-line distributor.

The unfortunate experience that Dave shares is one that occurs too often, and stands in the way greater growth. The wrong choice leaves such a bad taste that many are unable to move forward. To echo Dan “the right choice is a continuous blessing, the wrong choice, a curse”.

BTW – full discloser: “partner selection” is one of our core strengths, and our system has been successfully implemented by many of the F500.