16
Nov
07

what to do when a partnership doesn’t work out?

Amongst my various projects on the burner, I’ve been working with two friends of mine, who are both full timers, on creating a new startup. We haven’t capitalize on our partnership, which we envision to be roughly equal partners, but we’ve pitched in time and thoughts. Due to my transition to full time entrepreneur in September, I’ve been hoping that we can really turn the ideas we have into reality quickly. However, with their busy lives and existing commitments my partners haven’t been able to commit as much energy to the project. Meanwhile, I found myself wanting to run faster but feel held back because of our speed differential. Decisions are not made quickly. Communications are often delay and virtually non-existent. The situation has been troubling me for months. On one hand, I really think highly of my partners and friends. On the other, I am losing valuable time and energy.

So after many months of frustration on my part, and after dwelling on how to resolve it, I decided that it’s time to cut my losses here and move on. Below is the email I sent to my friends and partners. I haven’t heard back from them yet.

Have you experienced any similar situation before? What have you done to unwind the failed partnership and still maintain friends?

p.s. Their names are changed to protect their privacy and identity.

Guys, this is really not working for me. I think we need to make somechanges about the partnership situation, or maybe I just need to get out of this arrangement.

Since we are partners, and it’s important to be open and honest between us, I’m going to go ahead and come out with my observations and feelings on our
partnership for the last few months:

John:
I wanted to work with you from the beginning because of your skills and experience. That sense is even stronger for me today than when we started more than six months ago.

However, I do suspect that your career is going pretty good right now, which I totally respect and envy. I totally understand why you need to spend time and priority on advancing your career. Between that and your family, I suspect you have your hands very full. To be honest, I’ve wondered if this is a moment in time when you have the time and energy to start a business as a full-on founder. Maybe the timing was good six months ago, but things have changed (for the better!)

Paul:
I admire your work and your energy, and more importantly, you as a person; I hope you’ve worked with me long enough to know that. At this very early juncture of a startup, however, I wonder if between us there aren “too many PMs, not enough devs”. I suspect the thought might have crossed your mind
as well, but may be you were too polite to say it. There are also philosophical distance between us: preference of open source/LAMP technologies on my part vs. Microsoft technologies; your careful considered style vs. my riskier, damn-the-torpedos approach. While we have compromised on this before, e.g. Rails vs. ASP.net, I suspect that it’ll continue to be an issue. And I think you too are having a hard time finding consistent free time to work on the project because of your job, your wife, etc.

As for me, I know damn well how difficult it is to work full time and try to start a parallel side gig. I’ve been there, and it was darn tough. Many friends have tried this and eventually abandoned the projects. Between family and work, there’s just not much time and energy left over for “escape velocity” of a new startup. I have been stuck at that same stage, and finally had to commit myself to lose a year of salary to give it an honest attempt. It’s a substantial sacrifice to my financial bottom line, as you can imagine. And I want to make the most out of this time, as I doubt I’ll be afforded another such an opportunity again. The progress in the last 5-6 months has been too slow, for me.

I don’t really know what to do here, but have struggled with it enough in my head that these ideas floated up:

* Given that we haven’t capitalized, we can just split the partnership. I think we can talk about about time/ideas that’s been committed to the joint partnership and how to dispose of them. I’d just like to be able to explore the idea of XXXXXXXXX on my own, which I proposed to the group in Overlake Red Robin back in June or so.

* I’ll forge ahead with the project on my own, and to compensate for your contribution thus far we’ll agree on a share percentage of the company. If I make the project a success, which I fully intend to, you guys will participate on the upside. Obviously I’d love that I can tap you guys as advisors on the board as well.

That’s all I can think of so far, and it’s completely from my point of view. I’d love to hear your reactions and feedback. Let’s talk?

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