What is expected when offering a partnership with someone?

[bizmaker2]

I know I need help to build, and manage my online business and I am willing to give a percentage of my company away in exchange. But how do I determine how much to give away and how do I make sure I don't give it away to someone that is only willing to go so far in the process.

I need a hands on partner or two because I can't handle all the work, nor do I have all the skills required to make it happen. I do however have the experience and management skills to make it successful. I just need the right people to help me build it and run it.

Do I need to give away part up front? Or should I put up conditions based on performance and results?

I also think I need to maintain controlling interest to make sure I have the final say. I have seen too many times where two partners will fight over a difference of opinion and I do not want to take that risk. How can I make this fair?

Thanks in advance for any comments.

[BizDoc]

This is one of the hardest questions to answer in business. It depends on what you each bring to the table and sweat equity, respectively. The Solomon-like approach is to find a way for one person to bisect the equity and have the other select which piece they want.

[bizmaker2]

Well, There is no equity to speak of right now so there is nothing to split. So far I have covered all the costs and been the driving force behind the planning. I also have been through this before and know what we need to put it all together for a viable product.

I built a similar company before with a partner that built the site and let me make the business decisions and it worked out well. This time I have a different partner that I was expecting to build the site but when it came down to it, he could not do the same as the last partner I had. So I compromised and hired someone to help get us started. But now he is asking for 50% of the company and has yet to prove to me he is capable of finishing anything he starts. I have real doubts and want to protect my investment.
This is why I am asking for advice in this forum. I want to find out what others feel is right before I make my decision.

He has another business and so far has put that business first. I don't want to give away half my company to someone and heve them turn around and demand I buy them out if they can't make it happen. I need someone I can rely on and only when I know I have the right person who has put a good effort in am I willing to hand over a portion of the company to them. The amount I hand over would be determined by how much effort and value they put in.

So what is the norm in this situation? Should I give him half and hope for the best? or should I offer less and look for another partner or two if it does not work out?
I would think it be wise to play it safe for me but is that reasonable for him?

Cheers.

[KyleXY]

For starters, if he can't do what you expect him to do and had to hire another programmer to get things moving, why is he even needed. What value is he providing that you're not already capable of? Most of the best partnerships typically consist of one technical cofounder and one business oriented cofounder. While not all partnerships are like this, unless he has some great value to provide, why is he even a partner.

Second, wanting 50% partnership is ludicrous without looking over what is being done on each partner's share of the work. For someone who has done nothing, risk nothing, invested nothing, provides nothing, that doesn't make any sense. Also, before you even conduct business, you should have consulted an attorney to draft up a partnership agreement and put both of you on a vesting schedule. Agreeing to any arbitrary percentages moving forward without such a contract in place is asking for problems down the road. If you're unfamiliar with what vesting is, look it up. This is standard.

He sounds like he's already got other commitments. I would never partner up with someone who doesn't have their full attention and expects half. That's unreasonable and to be honest, you should just find someone else.

[BizDoc]

Are you currently working full-time in the business where he's working part-time? What is he bringing to the table? It seems skewed to me but I would need more information to make a sound judgment call.

Cheers!