Have you ever been screwed by your biz partner? Tell your story here.

[the]

And no, I'm not talking about the good kind!

No real point here, just venting, would like to hear some of your experiences.

My story is pretty basic. We've worked together on this particular business for 6 or 7 years. During that time, it has been very profitable and enjoyable for both of us (in this instance, more profitable for him than me, but he also has more responsibility, so he deserves it).

Also, we've been friends for 10 years. Gone on family trips together, birthday parties, etc. etc. Not like "best best" friends, but I still consider him and his family as good friends.

During the course of the business, contacts are made, and opportunities outside the scope of our business are presented from time to time (things like investment opportunities). These contacts and opps, which are the result of both of our efforts in the business, are agreed to be joint opportunities. This is not a formal agreement, or part of the written agreement between us, but is one that is discussed many, many times over the years.

Then one comes along that is a very promising opp. It comes to him, without me there. He keeps it secret from me, while "working it up." The amount of work, telephone calls, documents is fairly significant, and within a week or so, I catch wind of it. I don't say anything, because I figure why should I? And, I don't really believe in trying to force friends or partners to do the right thing. Plus, maybe he'll disclose it once it gets past the preliminary stage.

So this goes on for a several months. Activity picks up as the closing nears. While it's a little hard to think that he believes I don't know about it, apparently he does, he still keeps it a secret and says nothing. It is set to close next week, and he has said nothing to me (although he has told others in the office, including some staff people).

It was a bit hard for me to understand what was happening, or what his intent was, but piecing it together, it seems clear to me that he viewed the opportunity as worth more than our 10 year friendship and 6+ year business relationship (during which we have been through a ton together). Or he at least viewed the opp as worth seriously threatening our relationship.

The kind of irony (although I'm finding that it is not particularly ironic) is that he is the deeply religious one. Church every Sunday, Bible study groups, and he'll tell you time and time again how important integrity, "values" and relationships are. I generally don't feel the need to make those kinds of statements, but let my actions speak for themselves.

His secret deal is set to close next week. My strong guess is that he'll never mention it to me.

I'm not sure what is going to happen, but my guess is that the relationship is destroyed and will be over within 6 months. Oddly, I don't really feel mad (most of the time), it's mostly disappointment. I don't usually put a lot of faith in people outside the family, and he was one that I did put a lot of faith and trust in. And it seemed to be justified, for a long time. Just sad to see that have to end over a few dollars.

Ever happen to you?

[911Rob]

Wow! You sound like a great partner buddy! Good for you.

I feel for you, I really do.
All my current businesses are partnerships; so the story touches a nerve.
I've had many, some good and some not so good.

I'm a smart guy and I can take care of my own; trust me, you DON'T want to tangle with me.
I've lost two friendships over the STUPID thing we call money. Money doesn't mean anything to me; it comes, it goes. If anyone puts money before my friendship, they go! Period, end of story. I feel alot like you; I love actions to speak, I hate people that use too many words. I always reply, "Well you got the easy part over with cowboy; the jaw jacking. Now let's see if you walk the talk." I do coach my partners along the way with stories here and there about my ethics and values; flex my muscles here and there so people don't get the idea they can fuk with me.

I love partnerships, I love the people, the relationships, the good and the bad. I love to see how people react to different challenges. I'm a lucky guy cause I got the love of my life in my corner, everything else is gravy; so let's party.

I feel for you though; I know it would be a teary day for me if I was in your situation; but let me tell ya; I'd be walking away with no regrets if I felt I was getting screwed.

On another note, the main partnership I have now was a result of a very, very rocky first year. We tore up our partnership agreement 3 times and almost resolved to end it each time; but we sat down and discussed it. I gained soooooo much respect for my partner with "how" he handled the challenges, definately one of the finest men of character I've met.

Tomorrow's not a promise for any of us.

I truly hope you can find the strength to bring this to his attention before it turns into an Irish vengance type situation; that's where you not only burn the bridge, but you blow up the banks and re-route the river! Us Irish?

All the best, "the"
God Bless!

[the]

Thanks for the post!

I like partnerships, too, the people, challenges, etc. And I'm lucky to have my wife of 20 years always in my corner (my parents, kids, etc. too!). The other stuff is just stuff.

Your partnership in the first year, tearing up the agreement 3X, there's nothing wrong with that (of course). That's all out in the open, banging out a deal. And even on this deal, if he would have come to me in the beginning and said "Hey, I know we said we'd share the opportunities, but I think this one should be mine because XYZ" I think we would have been fine.

You think I should bring it to his attention? I've thought about that, but I'm not sure what I would hope to accomplish. His actions seem to have spoken louder than any words he can now say. It seems to me the bell can't really be unrung. But I'm not really sure. I guess if I were, I would be sleeping next to my warm wife right now, not sitting here typing this at 12:30 a.m.

One of the odd parts about it is that the opportunity is not some rare deal or anything. The genesis of it is information, knowledge and contacts that we made in the course of another deal several years ago. He chose to use that information and knowledge to put together a deal with a different partner. But I have the same underlying information, knowledge and contacts and could put together a similar deal, either by myself or with a different partner, easily.

[911Rob]

Hey you're a great guy and life's too short. Rather than just walking away from a good partnership with a bit of a dummy; talk it out and recreate the partnership. Everyone gets a little stupid from time to time; takes a big man not to get too greedy too.

My development partner branched out on a deal a couple years ago. I lost out on the deal and the commission for the sale of the deal property. I didn't say anything, but when the opportunity presented iteself; and it always does; I let him know exactly how I felt and that he laid out and presented the ground rules with that little episode.

Later in the year, he brought me a deal that is literally 20 times better than that little 'ol deal ever was, so it paid off accepting his faults.

Over all the years of being in business and dealing with all kinds of people, I developed a little phylosophy about life....."it's all about me" Only thing is, that's what everyones angle is. ME! I try real hard to think like them when I deal with people; what's in it for them, why are they in it. Most of my partners have big egos; so its easy to predict what they'll do and being in business with them is very simple; afterall, I'm doing it for the money. Ha, ha.

Sorry about your late night dilema, I think you should put it behind you; talk about the situation directly and honestly. If he turns out to be a bull ****ter, walk; you'll have a tear in your eye, but your head will be held high. What'ya gonna do?

Cheers bud!

[herr_oberst]

I don't find it ironic at all that the deeply religious partner is changing the game. I've seen it time and again and it has long since ceased to surprise me.

Good luck in clearing up the deitrius, and I am truly sorry for your loss. 2008 will be better.

[billh1963]

Originally Posted by herr_oberst

I don't find it ironic at all that the deeply religious partner is changing the game. I've seen it time and again and it has long since ceased to surprise me.

Amen! I refuse to do business with anyone with a "fish" on the back of their vehicle or anyone that says "Jesus is Lord" in their advertisement (fairly common in some parts of the South). Every time I have been screwed in a deal or transaction it has been by an "upstanding" church member. I believe that many of these people use their church membership as a shield. Surely one of the worse levels of Hell are reserved for the hypocrites....maybe the 8th level?

[Joeaksa]

When it closes, just mention to him "Congrats on the good deal you just closed" and drop it. If he is a far man he will then explain it to you and go from there. If not then IMHO the two of you are finished.

A partnership is just that, partners working together and if he is doing deals behind your back then the trust is gone...

[imcarthur]

I'll mirror Oberst & Bill above. My lesson learned was: never get involved in a minority partnership.

the: Talk to him & lay it all out & part ways if necessary but have the discussion soon before your resentment builds anymore.

Ian

[Shaun @ Tru6]

it will be worthwhile, and certainly painful, to discover how this situation arose.

denying/burying it is missing a chance at learning something about yourself and future relationships.

[LeeH]

My partnership was created by putting two competing business together with frightening little due diligence. It worked well while we were together, but my partner did try to turn things in his favor at the sale of the business. He had asked me to assume 50% of his debt when we combined our assets. It made sense as he had a lot more inventory and equipment. What I found out in the end was that one of the "loans" on his books was a personal loan he had made to his corporation for the down-payment. Of course I had also made a down-payment when I bought my business and that was never listed as a liability on the books of the new company.

I did research by calling the folks he bought his business from and discussed the matter with our attorney. I had all my figures straight when I presented my findings to him. The fact that he put up absolutely no arguments and just wrote me a large check conviced me that he knew exactly what he was doing.

[the]

Thanks guys.

I will certainly, at some point, discover how the situation arose, and all the details. It's only a question of timing.

Resentment? I suppose there is some, but truthfully, it's really more a feeling of disappointment in him, and some sadness. We've had a good run.

Oberst - there really isn't any detrius to clean up, if it ends, it's pretty much just a walk away.

Financially, I will be better off moving on. I wasn't in this for the money. The money was good, but the best part was it was a fun and enjoyable relationship, working with a long time friend, and it also was one that gave me a lot of time to spend with my family. The big upside to the relationship wasn't the day to day or the month to month dollars, but we were both hoping for the "Big Hit" on a deal or opportunity.

The funny thing is, this "secret deal" is by no means the "Big Hit" deal or opportunity. I could pick any of you who has $100K or available, and duplicate the deal within a few months (or I could do it myself). That's the part that's a bit insulting - being sold out for so cheap!

There's some other factors pointing to moving on, which aren't worth mentioning. But there are a couple of interesting things that are pointing the way, too. I was in the bookstore with my son, and picked up a book of stories by entrepreneurs. I opened it up to a random page, and the first thing I read talked about "moving on," and how there usually is a "triggering" event.

Then I come to PPOT, and see Nostradam . . . err, Nostatic's post:

Originally Posted by nostatic

Happy Year of the Rat! Hope you get lots of red packets.

A Rat Year is a time of hard work, activity, and renewal. This is a good year to begin a new job, get married, launch a product or make a fresh start. Ventures begun now may not yield fast returns, but opportunities will come for people who are well prepared and resourceful. The best way for you to succeed is to be patient, let things develop slowly, and make the most of every opening you can find.

LOL.

[Moses]

I first entered private practice as a junior partner of an established doctor. He didn't want to pay me a salary, so I borrowed money from the bank to pay my bills during my first year. The doctor needed a partner to provide call coverage for him when he was out of town, but he didn't want any financial risk. Fair enough. We agreed to keep finances separate.

I caught my partners secretary moving patients from my schedule to his. Of course she was only "stealing" patients with good insurance plans. I talked to my partner about the problem and he agreed to fix the problem. During the next three months, they continued to take patients from me and even deposited checks written to me into their account!

I left the practice four months after joining it and I opened my own office. Within six months I was busier than my ex partner. Within a year he was out of business. He left town and is practicing somewhere else...as a junior partner. What goes around, comes around.

[kstar]

Every problem I have had like you describe has been driven by greed.

And, I have always quietly walked away from such "friends" or "partners"; they are not worth the time and they will not change.

edit: What's ironic is that folks who obsess over getting more equity or hide opportunities so they can presumably make more money, typically don't. Much better to "share the wealth" and focus on what can be created via open, honest and synergistic relationships.

FWIW.

Best,

Kurt

[WolfeMacleod]

I'm still being screwed by someone, but he wasn't exactly a partner...he was a frequent customer who requested something custom.

June '06 he contacts me about something I had made for someone else. Wants me to do just that, so I did. During development, we had been tossing around certain spec ideas and we settled on a component he found (witthe help of other people and conversation) that was a bit different than the other components I use.
Made him his product, and word got out. He asked if I could make more, and I said sure, as long as he continued to select the one component. I boughthte parts, shipped them to him, he weeded through them and shipped them back. He got paid for his work...independant contractor or something, I suppose?
They were given a name, and became a phenomenal success.

Then, he wanted exclusive and sole distributorship. Which meant I'd have to wholesale every one to him...loosing the shirt off my back doing loads of work, and getting paid relatively little. I refused.
At the peak of it's popularity, he trademarked the product name about April of last year, and got a business license under that name at the same time without telling me. A coupe emonths afterwards, he send a "proposal" informing me of the trademark and outlining his plans to take over the name, I'm to give him the products specs, and teach him how to make them...as well as my other products so he could act as "backup manufacturing"
I said "come back with a better offer" because we are the ones who did the work to make the name a success. Our labor, our money, our reputation on the line.
Then I got a cease and desist
We replied with "No way, we're opposing" and filed for opposition (includes the reply)

We recently got his reply to our opposition, which is full of lies, and are currently putting together a list of people with "relative information" - customers, people who know the history, etc...about 200 in all, several of them who are lawyers...

That's the gist of it...

[911Rob]

Sorry to read about this Wolfe, that is a messy one!

Should be easy for you to win. You should think about hiring a legal consultant? Someone that's not a lawyer, but knows your industry very well and can communicate the facts to your lawyer. I use to do this in the construction industry and it is very helpful.

Lawyers have a tendancy to lose focus on the real issue and get off on tangents of legalities, a consultant could be very helpful to you? Ask around your industry for a 'claims consultant'?

Good Luck, kick his butt!

PS: you guys on the Religous kicks? Give it a break will ya? Your posts are like saying, "I won't do business with an Italian cause they're all connected to the mafia." Everyone is an individual and there will always be the bad apples that spoil the batch. A guys religous affiliation has nothing to do with stereo typing the individual into the 'crook' category.

[WolfeMacleod]

Originally Posted by 911Rob

Sorry to read about this Wolfe, that is a messy one!

Should be easy for you to win. You should think about hiring a legal consultant? Someone that's not a lawyer, but knows your industry very well and can communicate the facts to your lawyer.

The one person who knows this section of the industry best is difficult to get hold of, but I did speak to him a few weeks ago. He said "don't give in"
Couple people on the list are lawyers, one of which reviewed the proposal that was sent to me and gave very sound advice. Other people include some of my main competitors who were paying attention to the product's popularity, and released products to compete against it.
Couple others run large companies and have had to go through stuff like this before have given some sound advice as well.

The people on "the list" will be making statements and such, and some of them know the inside facts...

[911Rob]

I honestly think it would behoove you to hire a 'consultant' that keeps track of all the facts, summarizes the direction of your claim and communicates with the lawyers on your behalf.

Sounds like you have a great case, but my first initial feeling was for you to get some direction in collaborating, summarizing and presenting all the facts to support your case.

The last case I worked on, I charged my client about $40,000 on the file, his lawyer bill was over $250,000 and he won millions in retribution. He would've won squat if he hadn't hired me to deal with the lawyers in communicating the facts, etc. (construction related)

Reviewing your case as presented herein, I STRONGLY recommend it. Someone that has a little law/legal experience, but is an expert in your field.

Cheers and best of luck again!

[Jim Bremner]

Originally Posted by billh1963

Amen! I refuse to do business with anyone with a "fish" on the back of their vehicle or anyone that says "Jesus is Lord" in their advertisement (fairly common in some parts of the South). Every time I have been screwed in a deal or transaction it has been by an "upstanding" church member. I believe that many of these people use their church membership as a shield. Surely one of the worse levels of Hell are reserved for the hypocrites....maybe the 8th level?

I've been screwed by Non-Christians, Darwinistas,Jews &Self-Gods.

Your belief of not doing Biz with Christians in not ONLY arrogant, but ignorant.

I dealt with a major company that was Jewish owned, he wouldn't buy products from a Christian Company that I represent. After asking him if it would be "PC" for a Christian to avoid doing biz with a Jewish company did he finally relent and buy from my company.


In my small part of the world Christians are bashed and made fun of.

Each Christian based company that I've dealt with only about 10% of my industry, I've never been shortchanged nor treated unfairly.

[lendaddy]

Are you completely convinced that he's cutting you out? Is there ANY chance that he's telling his buddies "It's weird, the knows I'm doing this deal for us and for some reason he hasn't contributed"???

A long shot maybe but peoples personal perceptions can be skewed by circumstance and flawed recollection.

Or is this kind of deal one that you would have a had to sign your name on by now were you to reap any rewards?

In the end your best bet is to take me on as your new partner, it's the only logical move.

[lendaddy]

I will add a partner story as well. My father brought my uncle on as a partner maybe 30 years ago and we bought him out 10-12 years ago.

Anyway, the accountant when valuing the company made a massive error that increased the buyout by 60-80%. My father was very unsophisticated about these matters and it never occurred to him. When he did find out he decided to just let it go rather than tear open a wound with his brother.

My uncle still does not know about it and never will.

So not really a screwing by the partner but a screwing none the less.