What is a fair partenership

[Michael Behr]

Hello,

I have been approached for a partnership. This is good cause I don’t have a a lot of knowledge. He asked me what is a fair partnership for me? He also said he would need to be on the title and have control. I’m fine with the control portion. How do I determine a fair amount and protect myself  in the partnership? 

[Joe Villeneuve]

1 - List all of the roles/responsibilities that is involve with any deal.  This includes all the work t hat needs to be done on deals that are never closed, and due diligence done that has nothing to do with any deal.

2 - Apply a number from 1 to 10 for each R/R (10 being most important).  These numbers are NOT rankings.  These numbers reflect the relative importance of each number to the rest.  This means you can (will) have many R/R that have the same number.  Have all the potential partners agree on these numbers.

3 - Total up all these numbers.  They will more than likely total way over 100.  Now divide 100 by that total you just found.  Remember that number...you'll use it later.

4 - Now assign each R/R to the partners, and total up the numbers for each partner.

5 - Multiply each number for each partner in Step #4, by the number calculated in Step #3 (I told you you'd use it later.  This is later.).

The numbers you arrive at for each partner in Step #5, is the percentage each partner gets.  Once I started using this formula, I've never had a problem calculating the percentages each partner should get.  This is because this is both logical, and the end percentages are a result based on the relative importance of each R/R which is agreed to before any percentages are defined.