I founded a business about a year ago with three partners that was doing fine when we were all slogging away, but was awful and time consuming when we weren’t. See, the issue is we had other commitments outside of our business - never a good thing, by the way - and I often felt like I was alone in losing sleep in keeping things ticking over. Fast forward, we dissolved the partnership, I own the ‘business’ alone and we’re still great friends. Happy ending. Things don’t always work out this happily, so I created a list of the pros and cons I’ve picked up over the years.
Firstly, partnerships
Pros:
- Shared responsibility and natural bull detector.
- Companions to share the good times and the bad. Misery loves company, happiness loves it more
- Ideal for bootstrapping. If you can’t pay for employees, at least you have other people who have skin in the game and will do it regardless of immediate benefit
Cons:
- Shared responsibility. Doing all the work and sharing the spoils evenly bites
- Smaller piece of the pie. ‘Nough said
- Compromised vision. Too many leaders may steer the company in a direction you don’t believe in
Secondly, sole ownership
Pros:
- Full responsibility, full prosperity (or full despair)
- One captain, one vision
- For egomaniacs (secretly all of us?), spotlight by your lonesome
Cons:
- Lonely and emotionally taxing
- Difficult to bootstrap (I’m talking legit ZERO CASH bootstrap)
- Myopic outlook
Oversimplification, no?
I’ve deliberately presented the two options as being dichotomous, even though some overlap certainly exists. I’m not suggesting that sole owners do not look for outside input, nor do I suggest partners cannot agree on the right direction to take a company. The thing that’s important to ask before going into a partnership is whether you play nice with other kids, and whether the other kids contribute more than they will be taking, via their equity steak.
I’m not too gung-ho for partnerships right now but I imagine that might change at a later stage. However the bad times are particularly bad when you’re gunning it alone.
Where do you fall?
