Paperwork First
So I highly advise everyone get signed paperwork with your partners before starting ventures. Even if you trust the person/people it’s a way to have a record of whose responsible for what and who wants what. Even with paperwork nothing is perfect but it’s a step in the right direction.
With that said, Paperwork should be a placeholder to state the deal terms, not a weapon to screw with people. Whatever deal you do, have a PERSONAL lawyer who represents YOU involved, not just a company lawyer or a friend review it. Have someone who is beholden to your interests representing you.
I’ll share a few stories that illustrate the point.
So there’s a company I co-founded that I signed paperwork with a bunch of times but I keep getting the short end of the stick and the paperwork keeps getting used against me. I brought a huge amount of business and value and have seen almost nothing from it. This is a situation where paperwork didn’t help, it just continues to haunt me. But what did I learn from this? Taught me a good lesson about trust and that if people overcomplicate paperwork and then use it as a weapon against you its not people you should be working with. If they can’t keep themselves honest and have to resort to legal trickery then it’s a big red flag.
Another situation I was in was with a good friend and I had wanted a signed contract from the beginning but never pressed it and we got the deal done but he tried to optimize the deal for himself and failed and then tried to cram me down. He had a valid point, I ended up contributing less towards closing the deal than I thought I would – but that wasn’t our agreement. He actually said “next time you know to make sure I sign an agreement so you can hold me to it” which I respect and I know for next time. An agreement would have helped here and I probably would have agreed to renegotiate it anyway but learned an important lesson/
The situations that work the best are the ones with simple paperwork, simple shareholders agreements and simple goals and structures for everyone. Peoples’ responsibility needs to be clear otherwise problems will ensure.
Email This
