My answer to What type of mechanisms can we set up in a two-person startup that can do healthy tie-breaking?
Answer by Raad Ahmed:
It’s pretty typical (and realistic) to divide the company into unequal ownership. As other people have indicated, you have to have a leader. Splitting the business 50/50 never really works because there’s no way to really decide on issues if you disagree. You have to stop fixating on the percentage of ownership, and instead put a lot of thought into how you will deal with disagreements in the future. You can help alleviate some stress by:
- Vesting (as another answer indicated)
- Clearly define roles between you and your partner
- Establishing expectations for future issues or challenges (such as selling the business or buying out shares)
- Creating a clear business plan
Properly planning and organizing your business from the start can really help avoid conflict in the future. However, your partner needs to agree to some basic terms before you move forward. If he/she can’t, then it may not be the best relationship for business.
You should consult a business attorney.can connect you to a quality business attorney that can help you come up with a strategy that works for you. Business can definitely be complex, but if you take the time to organize from the start—you are much more likely to succeed. Check out our website for more information.