PARTNERSHIPS: HEAVEN OR HELL?

“Partnership is not a legal contract between two equal individuals. It’s an emotional alliance between two people who are committed to each other’s success.” – Warren Buffet

The Collaborative Archetype

In this blog, I discuss the Collaborative Archetype. This type of entrepreneur thrives on shared ownership and collaboration, building ideas in partnership. You can read my blog on the seven Entrepreneurial Archetypes and which one best reflects your essence [here].

Nils' Story: When Partnerships Go Wrong

I bumped into Nils* at a networking event. Fifteen months earlier, he had launched a men’s fun sockwear line with a partner. I felt he was a Collaborator Archetype. I asked him how his business was doing.

“Oh, that,” he said. “I closed it. My partner and I didn’t see eye-to-eye. He just wasn’t invested in the business like I was.”

“I remember how eager you both felt to get your business going.”

“We were buddies from university and we got along well. We saw eye-to-eye on the vision of the business and were both committed. We were both good marketers. I know they say it’s best to get a partner with complementary skills — but we were both eager to get started.”

Start Small and Test the Waters

For a big commitment, like starting a business, my recommendation is to start small. Test the waters by collaborating on a smaller project before fully committing to a partnership. This is particularly true when you have established bonds, friendships, or even family members. It’s very easy to overlook crucial skills and traits when you’re friends with someone.

The Pitfalls of 50/50 Partnerships

Nils continued, “I didn’t bother to expand on our basic partnership agreement. Everything was 50/50, and we both had to agree. When we didn’t agree, it ended up being a stalemate. In the end, he wanted me to buy him out at an unreasonable amount. We ended up closing the business at a loss.”

It’s so tempting to go into a business 50/50. Partnerships with equal ownership and decision-making power are ripe for stalemates that can block progress. Instead, establish a controlling partner upfront and formalize this in writing. Intentional inequality may seem one-sided but can often foster stability and clarity in partnerships.

This could have helped Nils — and if the other partner didn’t want to formalize an agreement upfront — that’s a sign that it’s not worth pursuing.

Planning for the Inevitable Exit

If you insist on a 50–50 partnership, establish an exit plan while relations are in good standing. Put in writing how disputes will be resolved.

Here’s how you can start the discussion:

“One of us may want to exit the business earlier for a host of reasons – it’s best to set up a potential exit strategy now, should that happen. This can only strengthen our partnership. It’s also important to discuss how we want to handle any disagreements.”

Pre-planning may feel like a chore.  Yet, the more “what if” scenarios you can hammer out before you start – the better. Clearly define roles and responsibilities. This may be a bit uncomfortable in the beginning, especially if you’ve had a good relationship. Later on, it’s simply too late to bring that up as the owners get in their defensive corners: “that’s not what I said… that’s not what I meant,” etc.

People Grow at Different Paces

Here’s the reality we all need to accept: it’s rare for people to grow at the same pace. Life gets in the way -- and at some point, one of the partners will want to exit the business earlier.

Nils made another observation: “I should have examined his life – what was important to him. He was working full-time and said when things picked up he would leave his job or at least scale back his work. That never happened. In retrospect, I should have seen that he was never going to leave the comfort of his job and lifestyle. It would have been best had I proposed a different split with me being a majority owner.”

By having a frank discussion about what’s important in their life and observing what they truly value, you’ll be able to better understand their level of commitment and tolerance for risk. You can start by asking, “how much financial instability can you tolerate for the next two years?”

Emotional Triggers in Partnerships

Everyone also brings their emotional wounds to the business: what they perceive is fair and what they perceive they are owed – and how that gets violated. This gets magnified when they see the potential to make ‘a lot of money.’ I call this ‘devil-in-the-eye’ syndrome: we start to see big dollar amounts, even though we are nowhere near that. In these scenarios, we can end up being like donkeys: emotionally stubborn. Business, in fact, becomes very personal.

This is not to say that one shouldn’t stand up for what they feel is fair. However, starting a partnership requires not just business smarts, but also self-awareness and emotional intelligence.

Spotting Red Flags Early

You want to avoid going to court at all costs. The financial and emotional toll it takes is akin to betrayal trauma; a shattering of trust that can break your belief in working with others.

Nils added:

1.        “I was doing the majority of the work because my partner said ‘my life is too hectic right now’ – without any indication that he would pick up the slack in the future or show appreciation for what I was doing.

2.        My partner failed to mention he changed one of our suppliers – something that was a standard protocol in the past.

3.        My partner was reacting way too slow to my requests to meet, and at times I felt our business was low on his priority.”

For every uncomfortable discussion you refuse to have early on, you will pay for it five-fold later. That small resentment you have in the beginning, because you are doing most of the work, will only fester until one day you explode – forcing your partner to be defensive.

Finding Heaven in Collaboration

Although I may be painting a picture of hell for this partnership, there are partnerships and collaborations that are pure heaven. Those partners, despite disagreements, have a healthy dose of mutual respect for each other. Don’t assume this will come automatically.

Your superpower as the Collaborative Archetype is your ability to listen and work together. Your shadow aspect is that your unwavering loyalty can miss vital clues and signs that need to be addressed.

Alternative Paths for Collaboration

Remember, there are other ways to work with your Collaborative Archetype DNA. You can develop strong strategic partnerships with other businesses:

·        I have a client who has a strong connection with complementary businesses that support her by referring clients (and she does the same with them).

·        Another client subcontracts a good part of his work. He typically hires the same people for each project but is free not to work with them if they are not the right fit.

·        Another client has a strong network base – she meets once a week with her peers to share struggles.

Entrepreneurship is a team sport, and for the Collaborative Archetype, it’s especially true and crucial as to who they are. Be creative in how you get these needs met: a business partnership structure is not the only way to go.

Nils' Next Steps

Nils told me that he was now happily working for a fast-paced tech company.

“And your desire to start a business, is it still there?” I asked.

“Of course,” Nils responded. “I’m always on the lookout for opportunities. When the time is right, this experience will help me make better decisions. My resolve has only gotten stronger.”

*For confidentiality reasons, not his real name or business.