business and marketing consultancy
Sapien Innovations Ltd - Cambridge, UK

Mexican Shoot-Out: If Founders Fall Out

If down the line you reach a stand-off with your partner, ensure you have a blind bid to buy each other out …

Just read a great blog by Duane Jackson (Kashflow), I can totally relate to his experience in the difficulties of a 50-50 partnership when setting up a business. Best of all I liked his suggested way around it.

Very often, equal shares of the business seems the fairest way to move forward when setting up a business. It did for me in my first venture. In my instance, a partner and I went in 50-50. The business just didn’t pan out as we planned. Almost from the outset, it seemed array. Was it the business? Was it the market? Was it us? No doubt all of the above. Certainly all the issues seemed to come to a head in our relationship, the partnership and the 50-50.

Some advice (including Duane’s) is don’t get in to the 50-50 in the first place. I am not so sure about this. The sense of equality at the start certainly helps get going in the first place.

The really great bit of Duane’s blog was the Mexican Shoot out clause (in Felix Dennis’ book) to include in the agreement at the start. You can guess the content. If down the line you reach a stand-off, have a blind bid to buy each other out. That I like!

If you’ve had experience of using this sort of clause, I’d love to hear your comments.

Duane’s blog: http://blog.kashflow.com/2009/04/08/mexican-shoot-out/

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