Before You Sign a Partnership Deal: What to Check, and When to Sign
A partnership is easier to enter than to leave. Most bad deals are not traps; they are good-faith agreements signed too fast, before either side said out loud what they expected. Slowing down for a few weeks costs little next to unwinding a partnership later.
Judge the partner, not only the deal
- Do you share the same picture of success in three years: size, pace, and when (or whether) to sell?
- How have they behaved when something went wrong: a missed deadline, a disagreement, a loss?
- Speak to at least two people who have worked with them before, ideally one where it ended.
- Are they bringing something you cannot easily buy: money, customers, distribution, or a skill?
Know what you are giving away
- Equity: what percentage, at what valuation, and how much is left for future hires and investors.
- Control: board seats, voting rights, and which decisions need their agreement.
- Vesting: equity that is earned over time protects both sides if someone walks away early.
- Milestones: tie money or equity to delivery, not just to promises.
The clauses that matter most
- Exit and deadlock: what happens if you disagree on something fundamental.
- Buy-out terms: how a departing partner's share is valued and paid for.
- Non-compete and intellectual property: who owns what you build together.
- Anything agreed in conversation but missing from the draft. Ask for it in writing.
Timing the signature
Have a lawyer review the final draft before you sign, and do not let a deadline set by the other side rush that step. A personal timing reading shows which months favour negotiating and committing, and which are better for due diligence and quiet preparation, so the signature lands in a stronger window.