percentage of partnership

[neil]

Hi everyone,

first time poster, but a long time in business.

Just thought I would browse the newsgroup and ask your views on a business
that I am considering going into.

Basically, I have a good friend who is an excellent artist. He already has a
business selling his art on things like greeting cards and stationary. much
of the work is local, so he has many local areas of interest already
sketched.

he is about to leave the country, but has approached me to take on the
business for him. He is not what I would call very business savvy, and
subsequently, he gets very little work.

I believe that I have the ability to take on the business and really turn it
around. this would mean that I would do all the advertising, setting up,
meeting clients, selling ect and he would supply the artwork (which he
already has on PC or I would have to email him a picture for him to sketch
and then email back)

So, he obviously wants a cut of the profit. The business cannot run with out
his ability or mine. So should it be a 50/50 partnership or should I take
the greater share as I will be doing the greater share of the running of
thebusiness, bearing in mind much of the work has already been sketched.

any views really appreciated.

regards,

Neil

[John A. Weeks III]

Post by neil
So, he obviously wants a cut of the profit. The business cannot run with out
his ability or mine. So should it be a 50/50 partnership or should I take
the greater share as I will be doing the greater share of the running of
thebusiness, bearing in mind much of the work has already been sketched.

Partnerships almost never work. Having one with a partner who is
out of country will be an international tax and legal nightmare.
Your best bet is to own the business 100% and have no partners.
You can work out a deal with this person to license the artwork
and pay some fee for usage or per impression. Make it clean and
simple.

-john-

[Jim Logajan]

Post by John A. Weeks III
Partnerships almost never work.

Tell that to these people:

Charles Rolls and Henry Royce. Rolls Royce.
Gottlieb Daimler and Wilhelm Maybach. Daimler Motor Company.
Bill Gates and Paul Allen. Microsoft.
Steve Jobs and Steve Wozniak. Apple Computer.
Bill Hewlett and David Packard. Hewlett Packard.
Bob Noyce and Gordon Moore. Intel.
Larry Ellison and Bob Miner. Oracle.
Roger Marino and Dick Egan. EMC.
Jim Goodnight and John Sall. SAS Institute.
John Warnock and Charles Geschke. Adobe.
Len Bosack and Sandy Lerner. Cisco.
Scott Cook and Tom Proulx. Intuit.
David Filo and Jerry Yang. Yahoo.
Sergey Brin and Larry Page. Google.
Niklas Zennstrm and Janus Friis. Skype.
Ben Cohen and Jerry Greenfield. Ben & Jerry's Icecream.
James Hanson and Gordon White. Hanson plc.
Meriwether Lewis and William Clark. Co-captains of Corps of Discovery.
James Watson and Francis Crick. Co-discoverers, structure of DNA.
Burns and Allen. Husband and wife comedy team. ;-)
(The entertainment world is full of famous partnerships, and worthy of a
long list itself.)

Post by John A. Weeks III
Having one with a partner who is
out of country will be an international tax and legal nightmare.

Difficult, yes. But if the pairing is complementary, it may be worth a
shot.

Post by John A. Weeks III
Your best bet is to own the business 100% and have no partners.

Disgree strongly. Where there are many business people who have succeeded
on their own, they are exceptional individuals. The odds of success are
increased by pairing with someone who skills and personality are
complementary to one's own.

[John A. Weeks III]

Post by Jim Logajan

Post by John A. Weeks III
Partnerships almost never work.

Gottlieb Daimler and Wilhelm Maybach. Daimler Motor Company.

Wasn't Maybach forced out of Dailmer Motor Company in 1907?

Post by Jim Logajan
Bill Gates and Paul Allen. Microsoft.

Didn't Gates screw Allen out of billions by insisting on a 60/40
deal rather than a 50/50 when they were running out of a hotel
room in New Mexico?

Post by Jim Logajan
Steve Jobs and Steve Wozniak. Apple Computer.

Didn't Jobs screw Woz in their deal over the Pong Machine,
and later, didn't Jobs force Woz out of his role at Apple?

Post by Jim Logajan
Larry Ellison and Bob Miner. Oracle.

And Miner is worth how much compared to Ellison, who is one
of the richest people in the world?

Post by Jim Logajan
Ben Cohen and Jerry Greenfield. Ben & Jerry's Icecream.

Didn't Cohen screw his partner badly when they sold out? Cohen
ended up with nearly 3 times the money despite being equal partners,
killing their lifelong friendship.

Post by Jim Logajan
Meriwether Lewis and William Clark. Co-captains of Corps of Discovery.

Didn't Clark commit sucide shortly after the mission due to Lewis
taking most of the credit?

Post by Jim Logajan
Burns and Allen. Husband and wife comedy team. ;-)

It doesn't count if you are married since that is an outside agreement.

Post by Jim Logajan
(The entertainment world is full of famous partnerships, and worthy of a
long list itself.)

Like the Rat Pack where the members mostly hate each other for life?
Or Dean Martin & Jerry Lewis, where Martin was so abusive to Lewis
that Lewis never wanted to see Martin again, and were only in the
same room at the same time 3 times in later life.

Sounds like a great way to go to me.

-john-

[Jim Logajan]

Post by John A. Weeks III

Post by Jim Logajan

Post by John A. Weeks III
Partnerships almost never work.

Gottlieb Daimler and Wilhelm Maybach. Daimler Motor Company.

Wasn't Maybach forced out of Dailmer Motor Company in 1907?

Um, Daimler died in 1900. Maybach may have been forced out, but his former
partner wasn't involved in it.

Post by John A. Weeks III

Post by Jim Logajan
Bill Gates and Paul Allen. Microsoft.

Didn't Gates screw Allen out of billions by insisting on a 60/40
deal rather than a 50/50 when they were running out of a hotel
room in New Mexico?

That deal made Allen a relative pauper, being only the 5th richest person
in the world, according to Forbes 2006 list, whereas Bill Gates is the
richest. According to this site, http://voteview.com/gates.htm Gates argued
for a 60/40 split on these grounds:

"Also in July 1975 Gates & Allen form a partnership, Micro-Soft, with Gates
60% and Allen 40%. Gates argued for the larger share based upon the fact
that Allen was a full time employee of MITS. Their initial investments were
$910 and $606 respectively (60-40)."

Seems reasonable to me.

Post by John A. Weeks III

Post by Jim Logajan
Steve Jobs and Steve Wozniak. Apple Computer.

Didn't Jobs screw Woz in their deal over the Pong Machine,
and later, didn't Jobs force Woz out of his role at Apple?

The event that precipitated Wozniak's departure was crashing his plane in
1981, and suffered short term memory loss. Wozniak has stated that the fact
that Jobs and he did not see things the same way probably helped the
company.

Post by John A. Weeks III

Post by Jim Logajan
Larry Ellison and Bob Miner. Oracle.

And Miner is worth how much compared to Ellison, who is one
of the richest people in the world?

Miner died in 1994, worth between $300 million and $500 million.

Post by John A. Weeks III

Post by Jim Logajan
Ben Cohen and Jerry Greenfield. Ben & Jerry's Icecream.

Didn't Cohen screw his partner badly when they sold out? Cohen
ended up with nearly 3 times the money despite being equal partners,
killing their lifelong friendship.

$19 million vs $46 million. They still seem to be friends who are doing
things together:
http://www.time.com/time/nation/printout/0,8816,1220641,00.html
The wikipedia entry indicates a few other things they are still doing
together:
http://en.wikipedia.org/wiki/Ben_and_Jerry's

Post by John A. Weeks III

Post by Jim Logajan
Meriwether Lewis and William Clark. Co-captains of Corps of
Discovery.

Didn't Clark commit sucide shortly after the mission due to Lewis
taking most of the credit?

Um, nothing about your sentence is even close. Lewis committed suicide, not
Clark. I'm sure there are many books on the subject, but I read "Undaunted
Courage" by Stephen Ambrose and would recommend it. Lewis appears to have
suffered from bipolar disorder, though malaria may also have been the case.
He was definitely deeply in debt at the time and depressed. Furthermore,
Lewis was charged with editing the official government narrative, so he
could have accorded himself as much acclaim as needed (though it was
redundant since Jefferson appointed Lewis as Governor of the Louisiana
Territory afterwords).

Now if you can support your earlier assertion that partnerships almost
never work with some verifiable statistics, it would certainly validate
your claim. Otherwise I think it is misguided advice.

[John A. Weeks III]

Post by Jim Logajan
Now if you can support your earlier assertion that partnerships almost
never work with some verifiable statistics, it would certainly validate
your claim. Otherwise I think it is misguided advice.

Lets put it this way...every partnership that I have ever been
associated with, either as an employee, customer, consultant,
advisor, or supplier, has ended in a big blowup. Ka-plewie!
If you need verification, just ask me, and I'll repeat it.

-john-

[NC]

Post by Jim Logajan

Post by John A. Weeks III
Partnerships almost never work.

I'd rephrase that; many partnerships are like fresh fish,
tasty and nutricious at first, but extremely stinky past
the "sell by" date...
OK, let's take a look at a few of them...

Post by Jim Logajan
Charles Rolls and Henry Royce. Rolls Royce.

Rolls and Royce were introduced by Henry Edmunds some time in
1904. Rolls died in 1910, Royce became seriously ill in 1911
and, although he returned to design work eventually, never set
foot on a factory floor until his death in 1933.

Post by Jim Logajan
Gottlieb Daimler and Wilhelm Maybach. Daimler Motor Company.

Daimler and Maybach worked together since mid-1890s. Daimler
died in 1902. Maybach left Daimler Motoren Gesellschaft in
1907 over bitter disagreements with several successive chairmen.

Post by Jim Logajan
Bill Gates and Paul Allen. Microsoft.

Allen and Gates founded Microsoft in 1975; Allen retired from
the company in 1983.

Post by Jim Logajan
Steve Jobs and Steve Wozniak. Apple Computer.

Jobs and Wozniak founded Apple in 1976. In February 1981,
Wozniak suffered short-term memory loss after an aircraft
accident and returned to Apple as a rank-and-file engineer
in 1983, but ultimately left the company in February 1985.

Post by Jim Logajan
Larry Ellison and Bob Miner. Oracle.

Bob Miner never rose to the executive ranks at Oracle. Neither
did Ed Oates, the third founder.

Post by Jim Logajan
Len Bosack and Sandy Lerner. Cisco.

Bosack and Lerner founded Cisco in 1984. Lerner was fired in
1990, Bosack resigned in support. After being married to each
other for a few years, the two are now divorced.

Post by Jim Logajan
Scott Cook and Tom Proulx. Intuit.

Cook and Proulx founded Intuit in 1983. Proulx retired from
Intuit in 1994 and is currently running Netpulse, a provider
of entertainment systems for gyms.

Post by Jim Logajan
David Filo and Jerry Yang. Yahoo.

Stepped down as co-CEOs to make room for Tim Koogle in 1995.

Post by Jim Logajan
Sergey Brin and Larry Page. Google.

Stepped down as co-CEOs to make room for Eric Schmidt in 2001.

Cheers,
NC