Hi 👋,

My name is Cathryn Lavery and I recently got out of a 5-year business relationship that had become toxic. Back in 2015 when I made the decision to get into this partnership I didn't know what I didn't know.

Here's the detailed story:

Why 50/50 partnerships are lazy and the expensive lessons learned from a toxic business partnership

The TLDR Tweet thread:

https://twitter.com/cathrynlavery/status/1316783779139194881?s=20

✅ Action Items

• [ ] Do you really need a business partner?
  • Answer the following questions:
• [ ] Got someone in mind? Audit them
  • Answer the following questions:
• [ ] Qualities they should have:
  • [ ] Financially stable / sensible
  • [ ] Shared vision for the business
  • [ ] Emotionally intelligent (High EQ)
  • [ ] High Integrity
  • [ ] Similar work ethic
• [ ] Background research for compatibility
  • [ ] Check credit score
  • [ ] SafetyPIN
  • [ ] Get a background check
  • [ ] Kolbe Test (find out their natural strengths)
• [ ] Decide on equity split (resources below)
• [ ] Decide on vesting schedule (recommended: 4 years)
• [ ] Hire a business lawyer for operating agreement
• [ ] Operating agreement draft, should cover:
  • Ownership & equity percentages
  • Capital Contributions
  • Management structure / Roles & Responsibilities
  • Voting / How decisions are made
  • Allocation of Profits, Losses and Distributions
  • How the taxes on this distribution are allocated and distributed
  • What happens if there’s a disagreement on the direction or future of the business?
  • What happens if an owner wants out or passes away?
  • Process for admitting new members
  • How new members make initial capital contributions and the required amount per member
  • If (and when) additional contributions are required and how members decide
  • Trigger events; bankruptcy, divorce etc
• [ ] Create Buy/Sell agreement
• [ ] Have personal attorney review final operating agreement to ensure your interests are aligned
• [ ] Sign operating agreement
• [ ] Have spouses sign spousal consent agreement