The Two Biggest Money Problems That Can Ruin a Business Partnership Don't let money matters destroy your relationship.
By Steph Wagner
This story appears in the March 2015 issue of Entrepreneur. Subscribe »
The day you enter into a business partnership is much like the day you say "I do." Both events create a contractual relationship that can be extremely costly to untangle, and most do need to be untangled.
San Diego-based attorney Robert J. Steinberger says 80 percent of business alliances fail for one of two reasons: "They are undercapitalized, or the parties involved cannot agree on how to run the business, including issues around money."
I certainly didn't expect to be on the wrong side of this stat. I co-founded a business I knew would be successful, but money matters tore the relationship apart. I assumed my partner and I both understood the responsibilities of equity ownership and the way distributions would be made. Then I realized she expected to be paid monthly, and as a percentage of revenue, not earnings. That was the beginning of the end.
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