Starting a business with cofounders is like getting married. A business, like a marriage, needs commitment, love, and trust to survive. Unfortunately with over 90% of businesses failing, more than half of couples getting divorced, there is obviously very little commitment, trust, or love.
You need to protect yourself
Most founders choose not to have an official contract or “prenup” with their cofounders for various reasons, including:
- “He/she’s a good friend. They’ll never screw me over!”
- “I hate contracts and legalese. I just want to have fun while making money!”
- “That stuff is for lawyers. When we get huge we’ll have enough money to hire a whole team!”
- “They’re going to get mad if I ask them to sign a contract. I don’t want to ruin the relationship.”
Don’t fall trap to these excuses. You NEED some sort of contract to protect yourself. Money sometimes makes good people turn bad.