Has it happened to you that a society is proposed to you under these conditions: “you provide the knowledge and I provide the money”? You can know more from the yankee journal now.
Or maybe we put the capital and you put the work and we go to 50% each?
This type of partnership is very common, they seem just relationships. In this article you will see that 50% to 50% is not always a fair relationship and that there is “a lot of cloth to cut” when one partner invests the money and another contributes the knowledge or their personal work.
Many people have done business under any of the following circumstances:
- A partner has the knowledge or idea for a great product, but does NOT have the capital to invest, so they find a friend or investor to put the money in and they decide to “go 50%”.
- Someone else has a business going on, knows they need capital to take advantage of new market opportunities, but they do not have this capital and they do not have collateral to offer as collateral in a bank to obtain financing. So an acquaintance provides the capital, and this entrepreneur offers a portion of the shares in return.
- A couple, boyfriends or married, decide to start a new business and consider that the right thing to do is to distribute the shares between the two at 50% for each.
- The parents have been in the business for years and now they want to divide the company between their two children, one of them works for the company and the other does not. But the shares are distributed 50%.
- Two brothers start a new company. You have your high paying job in a bank, you have gone to college and you have some savings. The other is an empiricist, a hard worker, he also has some savings, but he knows that he has serious deficiencies in the administrative part. The two of them talk and decide to take the business to 50%.
The Right Circumstances
These are just a few of the circumstances that lead two people to start a business at 50%, “half” as they say in some Latin countries.
As the years go by, these two partners who started with high expectations, see that the situation is different now and one of them feels that they are at a disadvantage.
The situations can be just as serious and the consequences as well, whether the company is having economic success or not. If there are profits, the problem arises of what is the fair way to distribute them. If there are losses, the situation is also very serious, especially when one of the partners carries the burden of work and another has placed real guarantees on credit with the banks. What would happen if the company fails?
In reality, we do not always choose bad Business Partners, but we make the mistake of not talking about some of the critical issues and this can cause that in the future “the bad side” that we all have to emerge in the relationship. Get more information from Bashar Ibrahim and research also.
We tell the story of that hard-working and enthusiastic entrepreneur who is looking for an investment partner to set up a swimming school for children. You need sixty thousand dollars and you don’t have it. You have a clear business idea, you have negotiated the long-term rental contract, but he is young, he has no bank credit and no guarantees to offer. His friend offers him the money, but he asked for 50% of the shares and something else. He asks him to take full charge of the construction, business administration and operation in exchange for a salary of a thousand dollars a month.