4 ms·

Ask HN: As a tech founder, how to deal with your cunning commercial partner

2 points by lazydog 13y ago

I am founder, programmer and creator of a product. I have two partners, one of which recently offered his shares to an external party. I was impartial to this, but the other partner - the financial guy - was against it. He is very cunning and has a large network of 'friends'. This particular time I was extremely busy dealing with technical issues for our largest clients. To my surprise I find myself in the situation having spent money (more than I cared for) on buying out the third partner - I feel tricked. I don't have a leg to stand on of course, as I did not read and understand the full implications of a cc which was sent to me. We do have equal shares now. It's how I feel in general toward this guy. I am tied up in technical stuff, and he is in charge of the company money. There are pros and cons to this, as he only in it for the money and will do anything (anything!) to protect his interests. I feel like I have to look over my shoulder every day or he will double cross me, or force me on doing things that are not entirely in my interest, but always in his. On other days I think he's not so bad, and I tell myself his 'devotion' will eventually bring me a lot of money. There's no way to be sure though it's a business. What's bothering me most is that he is more cunning than me, and he is doing this stuff all day, while I am managing the programmers, so I'm always lagging behind him. On many occasions I feel strong-armed or forced, but I cannot bring counter arguments to the table. How do I deal with this?

antoinevg 13y ago
You have two options available to you: 1) Trust him. 2) Write off your investment and, in future, only work with people you do trust.
redtexture 13y ago
Find enough money to buy out your partner, or bail. This is not going to end well, and this is only the beginning of the end. You have an untrustworthy partner, and you jointly as a management team will not be able to weather genuine challenges and adversity requiring genuine personal collaboration, trust, and united sacrifices from everyone, including your partner. Your lack of experience and inability to see how dependent your partner is on your continued successful and productive management presence has made you subject to his whims and pressure. Perhaps you are being played. It does appear that your values are divergent. You want the project to succeed, and perhaps your partner is on a "sell out at a big profit" track. Let him fear your departure to help him understand how little value his share of the company actually has. The founder shares should have been set up to require vesting, so that the person you bought out didn't have such a big post-engagement influence on you and your project. It's interesting your business partner was not interested in buying out the departing founder. Why? Could he make this move in relation to you, demanding that you buy him out on unexpectedly expensive terms, or threaten to sell to someone you don't know or like? (This threat would not have been allowable in a properly set-up share and corporation structure, where transfer of shares is allowed only by agreement or can only be sold back to the company.) This is where knowing trustworthy and experienced business advisers and lawyers can save your life, and the life of your project. These are all lessons in control over the entity and the shares, as well as in human understanding, motivation and trust.
- lazydog 13y ago
  I do realize that my partner is heavily dependent on me. And he definitely wants to make an exit with big profits. Yes I am learning fast about human nature, and big money being a huge motivator for people, and how far they are willing to go. Thanks. BTW: he was not interested in buying out the departing founder, he said, he wanted us to have equal share.
  - redtexture 13y ago
    You could use some independent, private professional advice, if you can afford it. Part of a function of a board, or a board of advisors, or independent advice separate from your partner, is to gain perspective on your choices and operations and structural decisions, and to do so in an institutional manner. An advantage of having a partner with values that align with yours is you can have more confidence that you are not working against each other.

2 points by lazydog 13y ago

antoinevg 13y ago

You have two options available to you: 1) Trust him. 2) Write off your investment and, in future, only work with people you do trust.

redtexture 13y ago

Find enough money to buy out your partner, or bail. This is not going to end well, and this is only the beginning of the end. You have an untrustworthy partner, and you jointly as a management team will not be able to weather genuine challenges and adversity requiring genuine personal collaboration, trust, and united sacrifices from everyone, including your partner. Your lack of experience and inability to see how dependent your partner is on your continued successful and productive management presence has made you subject to his whims and pressure. Perhaps you are being played. It does appear that your values are divergent. You want the project to succeed, and perhaps your partner is on a "sell out at a big profit" track. Let him fear your departure to help him understand how little value his share of the company actually has. The founder shares should have been set up to require vesting, so that the person you bought out didn't have such a big post-engagement influence on you and your project. It's interesting your business partner was not interested in buying out the departing founder. Why? Could he make this move in relation to you, demanding that you buy him out on unexpectedly expensive terms, or threaten to sell to someone you don't know or like? (This threat would not have been allowable in a properly set-up share and corporation structure, where transfer of shares is allowed only by agreement or can only be sold back to the company.) This is where knowing trustworthy and experienced business advisers and lawyers can save your life, and the life of your project. These are all lessons in control over the entity and the shares, as well as in human understanding, motivation and trust.

lazydog 13y ago
I do realize that my partner is heavily dependent on me. And he definitely wants to make an exit with big profits. Yes I am learning fast about human nature, and big money being a huge motivator for people, and how far they are willing to go. Thanks. BTW: he was not interested in buying out the departing founder, he said, he wanted us to have equal share.
- redtexture 13y ago
  You could use some independent, private professional advice, if you can afford it. Part of a function of a board, or a board of advisors, or independent advice separate from your partner, is to gain perspective on your choices and operations and structural decisions, and to do so in an institutional manner. An advantage of having a partner with values that align with yours is you can have more confidence that you are not working against each other.