Would you get married to a person you’ve only spent a few days with? It may sound like an insane weekend in Vegas, but startup founders do this all the time. Not realizing the commitment it takes – years, not months – founders are notorious for haphazardly jumping into partnerships. Just as you would hesitate to get married after a weekend, take your time when looking for a business partner. Find someone whose long-term interests and vision align closely with yours. And whether your new partner is a weekend fling or a life-long devotion, get a pre-nup.
The startup world’s version of a pre-nup is a contract between partners that specifies exactly how the company will operate – everything from what equity is owned by whom to the details of what happens if the founding team breaks up. Get a great startup lawyer to make sure your pre-nup includes all of the important issues. Use this contract to protect your interests, and those of the company. So many startup failures happen as a result of poor partnership planning. It might be awkward to talk about contingencies, but it could save your company down the road.