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Tips for structuring partnerships? (13)

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Hey guys, how would you structure a partnership where your partner is the content creator/expert and you handle all the marketing?

The expert would produce articles, podcasts, video tutorials, and ultimately the content in the courses we're going to sell. I would be handling all the marketing and promotion for this from the site design, funnels, media buys, and business development.

Given that the content is a very important aspect of this particular niche (financial), what would you say is a fair % split in the business?

Are there any good books out there on this subject?

And above all, I'd really appreciate hearing from anyone's experience with the marketer/expert type partnerships.

Thanks!

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How unique/valuable are your partners skills? What percentage they be happy with? has anything been suggested?

Who is providing the marketing/development budget? What value do you see the company at in 1 years time?

Your partner is the company if he is providing all the content. Do you have a contingency plan if things go bad and he disappears? Back-up content writers?

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They have a great investment track record and already produce content but don't know how to market it. Nothing on % has been brought up yet and my assumption is they'd want 50% of the business. I would be providing the entire startup budget, I think the company has the potential to bring in multiple 5 figures a month in profit in a years time.

Great point, yes he would be the entire business and no I don't have a contingency plan if he would bail on me. I suppose backup writers would be the only way to insure against the risk. Thanks for the questions they've got my mind going.

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]Hey guys, how would you structure a partnership where your partner is the content creator/expert and you handle all the marketing?

How transferable are the partner's skills? Although their skills might be key for this one project, your skills can apply to N projects, while his only to this one. So you have more options and don't need to do this one thing.

The expert would produce articles, podcasts, video tutorials, and ultimately the content in the courses we're going to sell. I would be handling all the marketing and promotion for this from the site design, funnels, media buys, and business development.

Given that the content is a very important aspect of this particular niche (financial), what would you say is a fair % split in the business?

As a default, I'd start from 50/50 in thinking and then see what one of the other does more, adds more value, etc. Perhaps there's also a discrepancy in terms of for how long each has to work. What you should definitely keep in mind is that you can correct some "mistakes" in the split by salaries and adding possibilities of selling shares at an undervalued price if X, Y, Z happens.

Are there any good books out there on this subject?

This is one topic where no book can give you an answer because it depends on the specific people involved. One thing EVERYONE has a hard time estimating is the homogeneity of the partnership. Generally, the more different the backgrounds and future plans, the harder it is to make any partnership. If you are money + marketing guy that only appears 5 hours a week in the business and the expert is grinding 100 hrs/week, even though your 5 hours are key and valuable, I can say from experience that the 100 hours guy will not be happy about almost any split at many points. The more you can allow some flexibility the better it will be. Usually partnerships work best when although the skillset is complementary, the hours put in and dependency on the success of the business is equal. If you or your partner don't need the business to succeed, but the other person relies on its success, it will be EXTREMELY hard.

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I don't have much experience in partnerships, and the others have answered your question well, but doesn't it also count that you are putting in money for marketing?
On a side note, have you thought about hiring a content writer? That way you'd pay him a fixed salary, and keep 100% of the shares.
But if your goal is to partner with that person, then it's different. Good luck

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Since he is the one who will be providing all the content, the only right choice is to go for 50/50. Otherwise he will feel like he's the one moving the company forward and still you're profiting more, which will make him unsatisfied and he will abandon the project at some point - I've been in a similar position some time ago and that's how it ended If you go for 50/50 and the project works, it could last for a while.

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@adefy thanks for the suggestions, good food for thought.

Thanks for sharing your experience! I was thinking along these lines but I needed confirmation from someone who's been through it before.

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Still take it for just what it is, my own experience. If you can secure the deal with proper contracts, explain why you need to get higher share and the other side accepts it, you can push for different conditions of course. The core of the deal is that the other site must feel that the deal is fair - that's all it is about

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Sounds good in theory, in practice contracts are not really gonna work, meaning that if you reach the stage where you have to point to the contract, the deal is half dead already.

Make it fair and, as much as you can, flexible. Have some rules for how much you can move one way or the other, so nobody comes up with ridiculous terms out of the blue, but don't set shares in stone imo.

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If your partner is of vital importance for the success of your company, you should give him at least 25% of the shares so he is committed to it. You are the only one that determine how vital he is to the long term success of your company

What is very important is that, apart from shares you also have a shareholder agreement in place that manages the relationship and defines points such as non-compete clause, clauses/reasons for buy-back, tag/drag along in case of a sale, dividend policy, paid vs unpaid time off, etc. Best is to check all of this with a lawyer if you're serious about it.

If he is not vital to the success of your business, you can just pay him on hourly basis/performance basis (like a contractor).

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True, once the sides start to argue and have to resort to the contract to solve the issues ... the partnership is going to hell. I still believe the proper contract can help to avoid some of these situations as they are already defined in it. But I see your point and its really a valid one.

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Yep, clear terms so you know what to expect as much as possible but it's important to not fall into the trap of thinking that once it's written down it cannot change.

Guess @anarchy got quite a non-answer answer: It's hard, things will change

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lol great thoughts all around. Hearing the thought processes are more valuable than any concrete answers you could have given so thanks!

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