hey Chandler bolt here and in this video
I want to talk to you about why I don't
believe in equal partnerships why I
especially don't believe in 50/50
partnerships and why you should never
enter into either now I've got a couple
quotes on partnerships and then I kind
of break down my core principles and
beliefs and kind of really had a
structure partnerships in this video the
first one is from an old mentor of mine
where he said don't partner out of
insecurity and I feel like that's
probably one of the biggest mistakes
that people make is they partner out of
insecurity right I know for me
personally when you're starting a
business it can be lonely
it can also be frightening and you feel
like you need someone there to kind of
validate what you're doing and to tell
you that you're doing okay and to help
out right now here's the thing a lot of
times that person can be an employee
they don't need to be a business partner
and by partnering out of insecurity
you're gonna give up a lot of equity
leave a lot of money on the table and
also long term you're gonna be really
frustrated because you're working with
someone that you don't want to work with
and then the second quote that always
sticks with me it's from another former
mentor of mine his name's Tommy Baker he
says I love ships so this guy's got a
yacht he says I love ships I love big
ships I love tall ships I love long
ships
I love fancy ships but lord of mercy
don't put me in a partnership right that
was his stance on partnerships and I
gotta tell you I've been burned on
multiple partnerships so that is pretty
in line with my stance on partnerships
so I do not partner in business with
people anymore
it's not to say I never will this is my
current stance because I'm just a firm
believer if you're a really really hard
worker then a lot of times if you're
given these these 50/50 partnerships
it's not gonna work okay so I kind of
break into why I believe that and kind
of what you should do instead
so 50-50 partnerships there is no such
thing as 50/50 effort 50/50 time spent
and 50/50 value at
so people just when they go into a
business partnership the most common
thing is like oh we just need to be
equal well the fact of the matter is you
bring different skill sets to the table
right if one person's doing tech one's
doing operations what would you have to
pay in the marketplace for that now one
way you can avoid a 50/50 partnership is
to agree to pay yourself market base
wages once the business reaches that
point right so then maybe when one
person is doing a job that you would
have to pay some 125 grand a year right
and you're only doing a job that you
would have to pay someone 50 grand a
year right so now you can set wages cuz
I talked about this in another video on
kind of compensation owner compensation
but you get paid a salary for what you
do you get paid a profit on what you own
so what you're doing in the business
oftentimes should not affect the equity
that you have in the business unless
it's at the very start so that's why
when it comes to 5050 partnerships like
there's just no such thing like and for
me personally as I'm someone who's very
driven very hard worker I found that
people are just riding on my coattails
right so I had I had two business
partners
and and one of them was just dead weight
and then it went down to two and I'll
tell this story and another video on how
to buy out a business partner but then
went down to two and then went down to
one and what I found in that whole
process is I did exactly the advice of
what I just told you not to do I
partnered out of insecurity I didn't
believe that I could do it on my own and
it literally cost me hundreds of
thousands maybe over a million dollars
at this point by doing that so I'm just
a firm believer do not no matter what to
do an equal partnership there's no such
thing as equal equal work equal money
you know obviously you need to evaluate
how much money is this person putting in
the business how much sweat equity
there's kind of this equation how much
skill set or value is being added what
does that equation look like and I'm
totally fine with partnerships as long
as someone has a majority right I'm in a
partnership for another business I'm at
where I'm definitely the minority and
that's fine because this I said to my
business partner this is your business
right you can
Vito me on every decision I don't need
to be the majority I'm an advisor and
I'm an investor and this is your
business so you run your business right
so that's why I don't believe in equal
partnerships and really what I think you
should do instead let's create a
partnership that resembles the work the
money and the value that's being added
to the business so are you bringing
sweat equity are you being are you
bringing capital are you bringing some
other form of value for the business as
a whole and is it absolutely
mission-critical so that's one way that
you can go or the other way that I've
chosen to go for the most part it's just
not do business partnerships I'm at the
point in business now where I don't need
to and I've got a lot of business
partners they're just my employees and I
include them in a profit share so they
get a piece of the upside but we there's
no exchange of equity and really this is
a you know probably for a whole nother
video but in a business where your goal
is not to sell a profit share is
actually better than equity because
equity is only valuable if you sell
right so they have something more
valuable than equity which is the profit
share and they're super happy I'm super
happy I'm not putting a wedding ring on
so you know a day after I meet someone
in saying let's ride this thing out for
three years and let's be business
partners right because obviously I've
been burned multiple times in that
process so when it comes to partnerships
proceed with caution do not partner out
of insecurity definitely do not go into
a 50/50 partnership because like I just
said there's no such thing now this will
lead to difficult conversations and
there was there's been times where
business partners I've talked to I was
50/50 partners where I said hey I'm
working way harder than you I put the
capital in this business to get this
business off the ground you're obviously
not as motivated or you know in this
business that's okay just give me more
equity like I'm fine to go 6040 6535 if
we just readjust the equity I'm fine I
don't have any problems here and I'll
keep working just as hard and we can
agree that you're gonna work not as hard
and I'm gonna really kind of put this
business on my back but obviously that
conversation is way harder to have after
the fact then before the fact so have
that conversation before the fact set
boundaries and you're responsible for
this I'm responsible for this here the
equity distributions that we're gonna do
have an operating agreement that's one
of the biggest mistakes I made is I went
into business and I didn't have an
operating agreement and then as a result
of all those things I got really bitter
and I felt burnt because I felt like
someone was just trying to ride my
coattails and my hard work to success so
that's my advice on partnerships I hope
that you found this helpful as always
comment below let me know what you think
I have a feeling that this is one of
those videos it's probably going to stir
the pot and people are gonna think that
hey there is such thing as a 50/50
partnership and you might totally
disagree with me if that's you that's
fine too comment below let me know what
you think in your rationale behind it
and I'd love to hear from you and as
always I'll see you in the next video
see ya