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Los Angeles Litigation Law Firm 424-284-2401

How To Prevent Your Friendly Startup From Disintegrating Into Enmity And Litigation


The world’s most iconic brands began with innovation and creativity. Think of Steve Jobs and Steve Wozniak, in the springtime of their lives, making a long-distance phone call to the Vatican just because they had figured out how to do it. But once business deals enter the picture, success can easily turn friendships into protracted legal battles. Think of Roger Waters and David Gilmour who, as young men, wept together over the descent into madness of their mutual friend Syd Barrett, but as middle-aged big shots, battled in court over which of them got to keep Pink Floyd’s inflatable pigs.

When friends develop a profitable idea together, money disputes can destroy the enterprise much the same way that conflicts over money can destroy a marriage, no matter how much the parties love each other. Perhaps what you need is a prenup for startups. There is no guarantee that your business project will succeed, but as any Los Angeles partnership & ownership dispute lawyer can tell you, putting the details of your professional partnership in writing can help you prevent and resolve disputes with your friend-turned-business partner.

Avoiding Disputes Over Each Partner’s Role and Share of the Profits

Prenuptial agreements outlining each partner’s respective responsibility for debt repayment have helped keep many marriages strong, but some of those couples also fight about whose job it is to wash the dishes and take out the trash or who has the final say about this year’s Thanksgiving dinner plans. In a business partnership agreement, you can decide which roles, whether fun or drudgery, belong to each partner. Perhaps invoicing is your job and responding to customer complaints is your partner’s, whereas your partner gets the final say about where to wine and dine prospective investors, but you are in charge of branded content on social media.

And then there is the issue of how much each of you gets paid. Even if your business bank account only has $300 in it now, there is no such thing as being too specific about who is entitled to what share of the money. There is not a big difference between 48 percent of $300 and 49 percent of $300, but there is a big difference between those same percentages once you get into the millions.

How to Part Ways as Friends, Whether You Go Big or Go Home

Like some of the most beautiful things in this world, startups are not built to last. Agreeing on your exit strategy will stop your professional endeavor from poisoning your lifelong friendship. Deciding how and when to sell out and how and when to cut your losses before the ink is even dry on your EIN application is the best way to stop the success or failure of your startup from resulting in a costly legal dispute.

Speak With a Los Angeles Business Partner Dispute Lawyer

A business partnership dispute lawyer can preserve your business partnership if you work with a lawyer from the beginning. Contact Litigation, P.C. in Los Angeles to discuss your situation or call (424)284-2401.


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