Had A Fight With Business Partner - What Are My Rights?

Sorry dude, but I have no sympathy for you. Becoming involved in business, especially within a partnership and NOT having a contract is just plain stupid.

Cut your losses and get out of there. $1500 is loose change.

Wow. That really sucks man.

One of the reasons I never do partnerships unless I am 100% certain.

It sounds like to me you have got yourself a very self centered ME ME ME type partner, am I wrong?

How hard would it be for you to get rid of him and hire someone off elance or something to do what he did?

A 60 minute video wouldn't be that costly.

If you have broken even on your first PPC test run, I think you are onto a good product. Weed out the bad keywords and work on your conversion rates more.

If you cant get rid of your partner, you can try to rationalize with him...'he look, I spent 1.5k, you spend 50. You need to invest more or this is going to go nowhere'. But it sounds to me as if your partner is half crazy so I doubt this will do you any good.

I think you should never go into business with someone who has an employee mindset(at least I think so) like you suggested. They do not understand what is 'fair' from the business owners perspective.

you're right i'm a complete IDIOT!

it's not the little $290 I'm concerned about. It's the business.

The product is good and there is a good sales system setup already and working now. This business is a few traffic sources away from making a steady $100-$300/day easily.

I think unless you had an agreement to 50/50 share the costs you don't have a leg to stand on
while he may have only contributed one day of his time, if he is well known in his niche you are banking on that too- you can't match hour for hour in that type of arrangement.

If you want to resurrect any thing, you'll have to sign a contract with him stating your % ownership.

If he doesn't want to pay any of the existing expenses, then suggest he have a smaller ownership in the business.

Either way, you need to get it on paper... it doesn't have to be too complicated.

Didn't you have some form of agreement in the beginning?

As Daniel said. I feel as though the best option at this point would be to redo the video with a new "face". Your ex partner could always come back around and want residuals, or "royalties" for essentially "starring" in the video. That would be a headache that you would not want to deal with.

If you would like the video offer to buy 'his' rights to it by letting him off the hook for the debt. My consulting to business people has run into this situation many times. You can agree to each having full rights to everything (sales pages, video, products, etc.) if the expenses and debt are split, you can agree to mutually owning the intellectual property to do with as you want, or you can give him the material for a negotiated amount.

The bottom line is that you can't just walk away. If you are successful this kind of guy will come back and claim the underlying intellectual property is his. You must find a way of settling - I would have a lawyer help.

If you study business forms you will find out that without written agreements partners have almost an unlimited ability to financially obligate the other, as well as muddy the waters on issues such as property rights, residual income, and profit sharing. (this applies to the US only). That is why I never do business outside of a corporate formation.

Get a lawyer or abandon the niche/project completely. Otherwise you'll never be rid of this guy. Negotiate for the best financial terms - my most successful tatic has been to absolve the departing partner of current and future liablities. Offer a carrot with a big stick behind it.

Sucks - but you've learned a life lesson comparitably cheap. Good luck...Russ

Sorry this didn't work for you... I have been in and am still in
several successful partnerships. Sometimes a partnership just
really beats the hell out of going it alone.

Who owns the domain and such? Is it you?

If so, you have the upper hand.

I am NOT saying to screw him over and tell him to go away,
although I don't see what he could do about it if you own the
domain and host all the content and footed the bills.

In my opinion, I would offer him a few things...

Maybe buy him out? Throw him a few hundred bucks to buy
his half of the project.

Or tell him you can both own the content and go your separate
ways with it. You both have the right to sell it... then you can
just beat him at the marketing game.

I would go for the first option first though since he could simply start
giving away your material and undermine you selling it.

Spend some money, create a new video similar to what has been done for your partner but this time YOU are in the video.

Sell the product with your IM skills.

Ignore your partner who is having an employee mindset.

He cannot say that you stole it because you did everything on your own, plus there isn't a contract between the 2 parties.

[Totally NOT a lawyer]

Anyway...

Partnerships are usually trouble unless you're working with someone who is rational and logical. So many people make business decisions based on emotion rather than logic. I've worked with many business owners, from startup newbies to successful multi-venture owners, who are simply far too emotional to make the proper business decisions.

Sounds like this is what you're working with now, and I can tell you it's a dead end street. You can try to rationalize until you're out of breath, but I can pretty much assure you that his logic and thinking are set in stone, regardless of what you might (TEMPORARILY) agree to.

Additionally, it might appear that you didn't commit to your own due diligence before starting on the project? I might be reading into your post incorrectly (or just don't have enough background) but it appears that you approached the production of this on the hunch that it "can be a good business." You may have jumped the gun committing your $1,500 to this and even his $50.

Regardless, whether you had written agreements in place or not, you both entered into an implied contract simply by exchanging value. This is not the same as a partnership!

Don't know what to tell you besides -- it's definitely not worth it to pursue a relationship here. Simple as that. That is, if the story you're telling is as it went down. Who knows?

(Dusclaimer: I'm not a lawyer, so talk to one before acting on my advice)

You will need to buy him out in order to do that.

The only other recourse you have is to sell the business to another party, and split the proceeds 50/50.

If you don't want to do that, your only recourse is to kiss and make up with the guy.

Wish I could be more positive, but that is how the courts will look at it. He's the subject matter expert, you're the biz guy, and they arn't going to give a rats ass who paid what.

thanks for all the suggestions everyone it helps a lot!

I'm going to try to buy him out by ridding his debt and let him do it himself from scratch if that's what he wants.

But if he demands too much what can I do?

AFTERTHOUGHT:

Another solution is ROYALTY

and another is to REDO THE VIDEOS YOURSELF! lol Become the face of your business.

So... if the thing is on the verge of earning $100 - $300 per day
why don't you just keep moving forward? It won't take long for you
to recover your investment. After that, pay the man his 50% like
you agreed to up front. Then, chalk it up to a learning experience
for your next project.

Tsnyder

Hi Roxsta
Sorry to hear about your plight. My thoughts go out to you because I've lost many hundreds of thousands to a partnership gone wrong as well. Here are the steps i did to deal with the situation:

- Took and inventory of the amount of money [not time] i spent on the project
- Looked at how much i earned from the venture
- Took inventory of how much i made [plus or minus]

From the above deliberation i concluded this:
What amount of money and time am i prepared to put into making this right?
How much money and stress am i prepared to take to get it right?

Only you can answer these questions and assess if you are prepared to do anything about it. I decided to take it all the way to bankruptsy if necessary and I'll tell you what... i nearly did go bankrupt.

These are just some interesting points laid out for you to consider. Hope it is helpful in helping you get over this ordeal. Thanks for reading my thread.

Dan

thnx for all the advice once again.

I offered him 5% royalties, he said 10%. I said 'ok' and now he's gonna think it over for 48 hours.

regardless, I don't care anymore. I can easily make a new product in a matter of days.

roxta,
Move on man, think of $1500 as your tuition fee for 1 semister. I bet, you've learned a lot from this kind of mess that even the most popular university can't give that kind of education.

Although I don't believe that only $1500 investment you've put inplaced, it could be tripple or even more. How about the time you've spent on doing the IM stuff for that project?

Learning is expensive and mistakes is the best teacher (sometimes) only if you know how to use it into your own advantage.

Get over it and move on

Gama

From what I read, it did not sound like you told him he would be responsible for 1/2 the debt. There is a big difference in splitting the profits and splitting the profit or loss. I have been in a situation where someone else agreed to take the financial risk and I would share in 1/2 the profits. However, that was clear in the beginning so the loss did not disrupt our relationship.

I like the idea that you let him do his thing and you start over. That or consult an attorney to protect yourself.

Good luck,

The solution is very simple.

Write up a post agreement. Ask him to do the same.

When he doesn't bother, put him out with yours.

===========================================
Dear Fool,

Into our project of ________
I have invested $____ and ____ hours.
I have done +++% of the work.

You have invested $____ and only____ hours of work.

The results acheived thus far have been ____% due my effort and
seed capital investment.

Your vision for how to manage this project, which you are likely not
able to pursue to success on your own differs from mine. I'm sure
you can see that such differences have doomed the project for both.

It is for this reason that we cannot continue this one-sided financially
draining partnership anymore. Your lack of financial investment has
been waived in return for the video. You have been compensated for
your 1 days work.

Give him a copy of the Good bye Agreement.

Tell him to go ahead and sue you. Answering complaints, cross-complaints,
depositions, discovery and continued court appearances will take many years
and many thousands of dollars.

I guess you can pay him 10% of the Royalties if you want.
-------------------------------------------------------
That's all folks!

Assuming this guy is not an established guru with a lot of money, then I would offer him a nominal amount of money (a thousand bucks?) and offer to buy the rights to the video from him, and move forward on your own -- since you are confident that this project is a money-maker.

Or, appeal to his ego and have him continue to be the "face" of the product -- but pay him on a per-video basis. (If he really is THAT valuable as a "front man.")

It often becomes a mess when you enter into revenue-sharing agreements with people who, quite frankly, do not understand the amount of work and knowledge it takes to successfully launch a website and make sales. Shooting a video takes a day. Maintaining a successful commercial website is a huge, ongoing project.

It's far better to reach an amicable agreement for both of you so that you can move forward.

You need to resolve any past issues, such as shares of past income and who owns what right now.

You also need to agree a way forward and who can do what with what etc.

If you don't get this in writing you will always be running the risk of getting attacked legally in the future, especially if you go on to make some money.

So make the best agreement you can, and even if you can't document that. Show in writing that you were willing to negotiate.

Make it crystal clear about the future arrangements and/or what each of you are allowed to do.

Ideally you make it so that you both get full access to everything, if appropriate, and you can both do whatever you like in the future with no strings attached.

Life and making money can be hard enough at times, even without having and anchor wrapped around you.

Then shake hands and move on.

Sam

Learn your lesson and walk away. Keep whatever you've paid for (domain name, hosting, the various accounts you've set up) and find another face that also has a heart and a brain as well.

I made a mistake like this but it wasnt as bad.

I went 50/50 with a newbie to help him with some debt.

I ended up being the driving force behind the product and he was the support guy. Everything went okay but then we sold it.

Now he wants to "work together" again, when in reality he doesn't even know what hosting is. He's a good friend but I've cut my losses and told him to his face what the problem is with making a new project together.

He got upset but it's for his own good.

Business is business and if you get all tied up in the emotional side of it, you'll get ****ed. In your position, I would recommend you maybe try and sell the product and then start up on your own with another market or something.

You can easy make $1,5k in your first month with a new business. Don't wrorry about it and just focus on the future.

Hurry up and paten the idea. Start selling your version of it.

roxsta,

IANAL but I DO have some experience here, have looked at it, etc....

Frankly, ***YOU*** THINK you put so much into the business, etc... You said HE was an expert, etc... You made some VERY big mistakes, and may have NO idea about this product so I would think a knowledgable attorney would tell you to either throw it out and FORGET ABOUT IT, or arrive at the info *****YOURSELF*****. Otherwise YOU could end up on the wrong side of a lawsuit, and have no leg to stand on.

As for partners, I could tell you the FLIP side!

I ONCE, for example, decided to give in and provide EVERYTHING WORK, PRODUCT, etc... for some IDIOT I partnered with, and he basically presold them, though I told him NOT to. IMAGINE, I had a LOT of undue stress, there could be LOTS of competitors, and forget any hopes of making any profit. The preorders didn't even count as they weren't fully aprised of the features or cost. HEY, if he decided to go on, GOOD LUCK! The provider, in fact the INDUSTRY, is DEAD, so it now has ZERO potential!

ANOTHER time, someone wanted to partner with me, decided to set aside an office we didn't need(I guess he could figure, and maybe even have appraised it at over $1000 a month), got business cards(Though we could have gone with my already built business), etc... He never fulfilled ANY of his obligations. MAYBE he felt I should do THOSE also! Last I knew, he was a 50 something person living(NOT KIDDING) in a trailer in his mothers back yard! He had a LOT of potential, and probably spent MILLIONS on various OTHER things, but he was BROKE last I saw, and probably is TODAY, if he is still around.

What of the people that said they would work at getting me a supplier to produce a database I had. THAT would have been a PALM like device in the early 80s! I don't think they did anything.

One friend(and we are STILL friends) basically decided to copy an aspect of my business, have me teach him the ropes, and be the head of it. He SAID we would be partners. I told him he was too late, but I showed him everything. ***I*** paid. He basically decided against really continuing. Well, I got the fruits of my labor, and he saw his income triple, so it wasn't a total loss.

NONE of those had contracts, but I never expected much to really come from them. Still, in the first two cases, they may have felt I owed them. And WHERE did your money go!?!?!? Did it REPLICATE something HE had? Did it fill a want YOU had? Is it something you can use for something else you were going to do? If so, I think it is laughable that you want HIM to pay!!!!

Oh yeah, I almost forgot. For that LAST person, he wanted to have his OWN server, and wanted ME to buy the control panel and pay for half. I ended up paying for a trial for the panel, and bartering the other half with the other friend he had that was acting as an ISP. It is a good thing too, because the whole thing was LOST! Still, I had to be at anothers beck and call at least 14 hours a month. At my rates, that is a LOT. I'm glad I didn't spend the $700 for the panel, or the $200/month for the server. Nobody really saw any use from it. I never agreed to it.

BTW I got caught in a POORLY planned(by that "friend" my friend had) mire, with NO hope of ever getting out of it. The customer took MONTHS to get back to anyone, had me doing GRAPHICS work, etc... And they couldn't make up their mind. They had me change the contract on their site a LOT. HEY, people are FREE with YOUR time as long as it is basically free to THEM! HOW did I get out of it? well, he had trouble reacing me one week, and the next I told him why. I had an aortic aneurysm. I told him I thought it was best that he get another person to continue.

But YEAH, GET A CONTRACT and DON'T make purchases unless they are from a BUDGET for that, or AGREED TO! BTW Watch the show "American Greed". It will give you a better idea of the problems you can have.

Steve

I kinda did a similar thing. Yes have to agree with seasoned, get a contract before you start anything with a partner.

I would also just pick up, walk away and forget about it.

My business partner is also my husband. I am from singapore and he is from Perth. We moved up to Sydney together. We are legally married but we never had our wedding. We agreed that the money is better used to start a business together and we will plan for a wedding in future. He took an overdraft from the bank as well and we purchase a health food shop in Sydney Australia.

He is much older than I am and I thought life would be easy with him around. It end up he had serious paranoid and self esteem issues. He felt that the work in the retail store was beneath him. So it all started from year 2008 until 2011. He only wanted the role of a supervisor and he sits in the office in the backroom, doing his own internet business. While I struggled on the shop front alone. I was forced upon a crash course in running a business and understanding all our products from zero to hero.

He wanted to take control of the finances. So i thought it was a good idea. But at the end of 2 years. I realise that he have done zero book keeping and he hadnt filed the tax statements in 2 years. All he ever did was give out the credit card no. to suppliers when I needed to order more goods. On the store front, It was a profitable business and my customer base grew and grew. It went from 0 to 5000 members in 3 years. And my customers loved me and I did plenty of large repeated sales.

I trusted him at first but my gut feeling tell me that something was wrong. I checked our joint business account and it had only $1. Imagine that tight slap. We had serious violent fights. But he didn't want to hand over the funds that were transferred to another account that I could not access. I grew angrier and angrier day by day and I took all the shop's daily taking to bank into my personal account too. He became even more destructive and started shutting my store, scaring my customers away and stole money from the till and my handbag. He even threaten to trash my store.

When we got back home, our private r/s was very bad too. One morning, he decided to stop paying the bills. We end up in a abusive and violent fight. My store was shut the whole day. He was swinging me around until I called the police because I wanted these fights to end. He knew australian law better than I did. He was much bigger than I am, so he usually threw me around bare handed and I was alot smaller, I needed a weapon to protect myself. I couldnt fight him bare handed. He took an AVO on me for hitting him with the vacuum cleaner. For a few days, my shop did not operate again. He was hysterical and I left the entire operation out of fear for my safety and I thought if I left the shop he might get the staffs to run the store. I was just concern about my business.
I Live 3 weeks in a motel and another month with strangers, before returning home to Singapore. He changed the lock to our rented apartment so I really survive out of a single luggage for almost 2 mths.I went to court and he never came to withdraw the AVO.

What are my rights...to my shop and How can I resolve this. The shop is under both our names. He has seen locked me out of the camera access to our store too. So i have been completely cut off from my biz unless i go bk to sydney. But I fear for my life....

Is there anyone who can advise me what to do. I left in June. Its Sept now.

This thread is nearly 2 years old and I'm not buying "Sonya's" story...