Startups · Cofounder

My business partner keeps missing deadlines, how can I address this without coming off harsh?

Joe Thomas Founder/CEO:UPDTR

October 2nd, 2016

I'm the founder and I plan on giving him a small percentage in my company after we get funded(vesting) as well as salary,currently he's not getting anything and I only asked him to do small things like give me data about the market for our presentations. He brings alot to the table so I dont want to criticize him. I just want him to be aware that he is not being fair to me. Im in my 20's and he's considerably older and has a family.

Ema Chuku Designer. Product Developer. Founder @ NuPad

October 2nd, 2016

You have not given him equity or some sort of compensation yet you expect timely commitment from him? You mentioned he has a family. This is not complicated, have a sit-down talk on expectation, commitment, and equity split. Then you will have something worth vexing about. Until then, you shouldn't expect more than you have offered. Right now it seems like your the company operations is on "here say". 

And this has nothing to do with age, etc.
And one thing you should understand you both are on different life responsibilities. Until you have a set business or company, the venture is not going to be his top priority.



Mike Robinson

October 2nd, 2016

Joe, another possible perspective - the promise of "a small percentage of your company when and if you get funded" just might not be enough motivation for someone with lots of experience and a family to worry about. Have a frank discussion about whether this person is truly excited to be involved on the terms you are offering. 

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

October 3rd, 2016

Jerome: There is a big difference between a social enterprise and a for profit business.  I am a believer in personal responsibility. I was  lawyer for 40 years and never missed a court filing deadline. You have an all volunteer workforce for a social enterprise?  I have volunteered for charitable work. Anyone can lick envelopes or do kitchen work in a soup kitchen.  But if you need an engineer or a board member or anyone for a skilled position you are going to be limited to a pool a people who will work for free.  For a for profit business there is never an excuse for this. If you want the business to succeed, raise or borrow money and  hire the best people you can find.  And never post on FD that I am having a problem with a friend who doesn't meet deadlines.

Jerome Peloquin President, Family Fish Farms Network, Inc.

October 2nd, 2016

Two things ... Lack of dependable reliance is a fatal flaw and is often a symptom of a deeper problem. One way to address this is to have some consequences for failure to perform ...this may seem silly but it is essential here. If there are no consequences then there is no real in centive for him to change his behavior. Clearly the stock you offer is not such an incentive. Try setting a fine of reduced reward ... otherwise I would cease relying upon him and find someone else, now before he really screws things up later. Jerome Peloquin President The Family Fish Farms Network, Inc. 717 Lawrence Street, NE Washington, DC, 20017 cell: (410) 227-0498 (Skype) fishfarms1 LinkedIn Profile email: aquaponikus@gmail.com website: www.thefamilyfishfarmsnetwork.com We grow healthy local food ... save fresh clean water ... create decent paying jobs.

Kirill Pertsev

October 2nd, 2016

Tie his compensation and equity to the performance. Do not promise him X%, promise him a specific vesting schedule which includes some measurable milestones. If it doesn't incentivise him you do not have a healthy relationship.

David M

October 3rd, 2016

Just saw the circumstance with his child.  Empathy is great and admirable.  Open communication can only facilitate solving your current issue.  

From his standpoint though again, I am seeing no pay and no contract.  If I am misreading and he has a contract then ignore.  There are so many people I see in these discussion that have near zero competence when it comes to the legal aspect of starting a business.  My thoughts would be if you value your friendship, and if you can afford it (find a way) and if you are serious about this person being a long term employee, don't leave him guessing.  Sit down with him and tell him you want to provide some security in his mind through a contract..that you regret you can not pay a salary currently, but that you value his work and want to let him know he has some form of commitment beyond a handshake.

With that discuss your requirements of his time.  Find out what he can and can not do and move forward.  Being a friend can in fact make things more difficult. I understand that.  Start out with, "I want to have a discussion and I do not want it to affect our friendship.  This is strictly business, and I want this conversation to be in that context out of respect for our friendship in order to protect it.  We both need to communicate where we are, and where we are headed...expectations, restrictions, complaints, etc."

Mike Robinson

October 3rd, 2016

Joe,

Firstly, congratulations on sparking such a robust discussion! At the risk of oversimplifying, it seems the responses fall into two veins:

A: As Jerome stated, personal commitments must be honored and that is a very basic tenet of any business relationship. If you really feel that this friend of yours gave a personal guarantee and then did not follow through, that is a red flag (or at least a yellow one). 

B: As many of us have mentioned, your enterprise is NOT a non-profit or volunteer organization so your friend's motivation to help you is probably linked to his belief in a realistic financial benefit. 

This sounds like it could be a situation where a friend wants to help but does not have any clear motivation to do so. 

The only way to find out is to grab a coffee as Ema suggested. Rekindle your friendship and try to gain clarity about what your friend can and cannot promise to do given that there is no cash salary available. Also, as others have suggested, try to convert this from a handshake discussion into a written agreement with a firm commitment to give equity in return for well defined deliverables. 

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

October 2nd, 2016

You have a problem that is of your making not his. You want this person to work for you but you don't want to pay him.  Our business world is based upon employees getting paid for their work. Like a lot of entrepreneurs you see it as a problem when someone who you do not pay does not perform.  You say that he is not being fair to you when in reality you are not being fair to him.  If you believe in what you are doing then o all in. Take a credit line against your home; get a "no interest for a year" credit card (or two or three). You are asking this person to take a risk on your business. Take the risk yourself, first, and just pay him. I suspect that it will resolve the question of his being late. 

Irwin Stein Very experienced (40 years) corporate,securities and real estate attorney.

October 3rd, 2016

Jerome- If you want people to do something, you hire them to do it. If they don't perform you fire them. FD is populated with people who seek partners because they cannot or will not write a check. The gentleman in question is only asked to do "small things".  The entrepreneur should get those small things done by someone else and stop without complaining about  it.  Success in business is execution. If a partner does not perform then the partnership agreement has provisions to dissolve the partnership. Here there is no partnership agreement. Your ideas are idealistic.  In the real world, people play games like" the check is in the mail."  A good business person protects himself, gets it in writing and stays in control.

Ian Shearer Executive Chairman at Parakeetplay

October 3rd, 2016

Watching the exchange between Jerome and Irwin I have to say that I am firmly with Irwin.
Joe posted a question in which he says he is unhappy with his Partner for not performing as requested, and then Joe tells us that his Partner is not on a salary and has no Equity other than a vague and unquantified promise. 
Frankly I think Joe needs to look at himself and his management skills. If he wants his partner to perform he has to be very clear on the reward to his partner. Sounds to me like the Partner is helping him out of friendship and is now getting slammed because he is not performing! 
This is a business not a social enterprise, and needs to be run as such, where people perform tasks and the rewards (be they equity or cash) are very clear. In the absence of that clarity you can't expect accountability.
Joes friend is probably being too nice to him.