They say people can be married to their business — well, it follows that people can also go through messy business divorces. In a recent article in Crain’s Cleveland Business, U of M entrepreneurship professor James Price discusses how he often advises small business co-founders to sign a prenuptial-like contract in order to avoid conflict if one or more founder should jump ship.
Much like young love, entrepreneurial partners are often enamored with the start-up at first and might think that nothing could go wrong. Price advises that business partners instead think rationally and come up with an agreement that will force them to reason through what should happen in case of a break-up.
The fickle nature of business, with its soaring highs and Mariana Trench lows, can put stress on the best of partners. Sometimes “love” is not enough, and that is where a start-up pre-nup comes into play. Price claims that these contracts are a “clear-eyed way of building flexibility” so that both business and personal relationships can remain intact regardless of how it all plays out. See the full article at Why I Always Tell Co-Founders to Sign a ‘Pre-nup’.