As adults, we’re all familiar with the oft told tale of someone being hoodwinked in a business venture because he or she didn’t sign a contract.
Or we’ve been privy to many a courtroom drama where the moral of the story reinforced the same lesson.
Or we’ve been admonished to simply, “GET IT IN WRITING!” by family and friends alike.
In spite of it all, we often neglect to do the needful, or simply find the topic too difficult to broach when just starting out a business relationship where everyone is getting along oh so well.
On the other hand, however, many of those who’ve heeded the advice, can testify that contracts done in the early stages of a venture, can easily cheat those less able to project the full value and extent of their contributions.
On the other hand, however, many of those who’ve heeded the advice, can testify that contracts done in the early stages of a venture, can easily cheat those less able to project the full value and extent of their contributions.
Having just said that, you may be thinking that I’m heading down the road of saying you shouldn’t sign contracts, but nothing could be further from truth.
A contract is definitely the professional way to go about protecting yourself, and it should be employed as one of the weapons in your arsenal to do so.
But I’ve found that something else may be even more foolproof in securing what is rightfully yours. And even when it doesn’t, it can prevent others from profiting off your hard work in a way that is not commensurate with what they may have put in.
But first, a little story. Of course, right?
I had a client sometime ago, whom I worked with for a number of years on a project. And while doing so, I opened his eyes to a world of possibilities he admitted he’d never even thought of. But not only did I introduce him to a world that became possible for him to inhabit, I also helped him create the products that could stand up to scrutiny in that world.
Every product was put through my own rigorous editing, reshaping, restructuring and quality-testing, before it was to be released in the wild. In some cases, I also helped finance a number of those selfsame products, while in others, I fully paid for their creation; and all of this occurred with his full knowledge.
When it was all said and done and we finally sat down to review our terms of engagement, with a view to having them codified on paper by the professionals, there was a conflict. Apparently, I had said some things four years earlier that led him to believe I had no interest in owning any of the products I had helped create and pay for.
Apparently, I had said some things four years earlier that led him to believe I had no interest in owning any of the products I had helped create and pay for.
And though I’m certain our conversations relative to how we would both be compensated did not occur in the manner he says they did, I’m even more certain of the role I played in producing those products, the money I had spent, and the vast amounts of time and effort I poured into them…thousands of hours.
To me, by the time we got to that point, it no longer was an issue of what may have been said or misunderstood. To me, what was obvious is that my actions spoke very clearly of ownership, and, at times, his actions clearly spoke of an understanding of co-ownership.
To me, if he had intended to own all of the rights to the intellectual property, he certainly shouldn’t have allowed anyone else to pay for their creation, even if willing to allow them to participate in their production. To me, there is no ambiguity about what spending money for things mean; it means you own them, even if only partially.
But more than that, I certainly wouldn’t expect anyone to pour that amount of time into any endeavor without expecting them to want ownership (truthfully, in the end, he was gracious enough to admit that what I did for him, he could not have expected of anyone, and frankly does not think anyone else would have done it).
So what saved me from having to endure the fruits of my efforts be so unfairly divided, leaving me with the shorter end of the stick?
What saved me is the fact that I had…”LEVERAGE”.
Even up to the point of that day of failed negotiations, I was still in the position of being the one to help create, help market and help give the direction that would ultimately make the business make money. I was still, in a word, useful.
And this is the crux of the message I want to get over to you today as you read this.
If you ever go into a venture with another, try as best as you possibly can to ensure that there’s something that you’re bringing to the table that the other person doesn’t have, cannot get, or will not be able to acquire without a considerable amount of effort and outlay on their part, in terms of money and or other resources.
You literally need to BE the thing that many people foolishly say you cannot, which is, IRREPLACEABLE.
Many people assert that no one is irreplaceable, and they do so because they’re both too literal in their understanding of words and piss-poor in their appreciation of context.
Many people assert that no one is irreplaceable, and they do so because they’re both too literal in their understanding of words and piss-poor in their appreciation of context.
The plain truth of it is, if you find yourself in a scenario where what you bring to the table is a million-dollar skill as part of what you’re willing to trade for equity in a business venture, and your partner does not have two nickels to rub together to access that level of skill anywhere else, you are in fact irreplaceable within that context. And it is that very fact that will allow you to be able to negotiate for what you want even when conflict arises.
So please, go ahead and get your contracts signed early on. They can be mightily useful in heading off conflicts, and can also be used as reminders when people forget their responsibilities or the terms of engagement.
But if for some reason in the early days of your venture, you forget to do so, or you were mindful enough to have gotten a contract but feel the need to re-assess how you’d like to engage based on what you see occurring, your leverage might just be the only thing that can speak for you then.
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