HOW SHOULD I BRING A PARTNER INTO A NEW BUSINESS I WANT TO START AROUND AN INVENTION?

There are a broad range of ways you can structure a partnership at this point. Part of your decision lies in how important cash-flow is to you right now. For example, if you have some cash to move the idea forward, but you are looking for business guidance, you could structure something where the partner is earning “sweat-equity”, and/or is paid. They don’t pay you anything up front to “buy-in” to the business.

If, on the other hand, you are cash-poor and you need not only management support but cash to move the idea forward, you can structure a percentage of ownership for an equity investment. In this case, you are setting things up so both parties have invested some cash in the venture and are working together to move the company forward.

A big question with all of the above is the appropriate ownership percentage allocated for a particular dollar investment and/or sweat-equity. There is no perfect answer to this, as there are too many factors to mention here (estimated valuation of the company/idea, number of people willing to become involved, risk level, current capital constraints in the market, etc.).

Finally, I think you are going down the right path of looking for a partner versus going alone. Your chances of success are much higher with a properly structured partnership versus working as a single party. However, be very, very careful about who you partner with and the clarity of the relationship. Many, many partnerships blow up when different parties have different understandings of how much work will be involved, who makes what decisions, what future capital infusions are expected, etc. Have many conversations about all of this, and fully document the ownership structure, management responsibilities, and workload expectations before starting to work together.

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