Starting a Business with a Partner? Don’t Skip These Legal Conversations
07 Aug, 20252 minsIt’s tempting to jump into business with someone you trust: A former colleague, a friend, or...
It’s tempting to jump into business with someone you trust: A former colleague, a friend, or someone whose skills complement yours. But according to Daniel Rizzi, lawyer and guest on Careers in the Cloud – Episode 37, skipping the legal groundwork is one of the biggest mistakes tech contractors make when partnering up.
“If you have a lot of hard conversations, you don’t need to talk to lawyers very often.”
What kind of “hard conversations”?
Topics such as:
- Who owns what percentage of the business?
- Who’s putting in more time, or more money?
- What happens if someone wants to leave, or gets a better offer?
Daniel explains that these questions need to be settled before you incorporate.
You’ll also need proper documentation, including a minute book and a shareholders’ agreement, especially if equity, funding, or intellectual property (IP) is involved.
“A lot of people avoid those awkward chats... but both parties need to understand expectations going in, and write them down.”
Don’t assume everything will stay “friendly.” Daniel says:
“Five years later, when one of you wants to exit, you’ll be glad you documented it all early.”
Working with a partner or building your own team?
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