What are the best practices for protecting both parties in a partnership agreement?

It's no secret to me that partnerships can propel entities to achieve more by pooling resources, knowledge, and expertise. Here are three critical considerations to choosing the right partner: Aligned Values, Divergent Strengths: Seek partners with shared values but different strengths, fostering a complementary and robust alliance. Transparent Communication: Embrace radical transparency to build trust, making sure all expectations, and potential conflicts are aired and addressed upfront. Long-term Vision, Short-term Flexibility: Share a long-term vision but maintain flexibility in short-term engagements to adapt to changing circumstances and capitalize on new opportunities.

- Um passo antes da escolha do parceiro no desenvolvimento do negócio, é importante ter muito claro a expectativa do cliente sobre os resultados que ele espera. Parece óbvio mas não é, pois muitas vezes iniciamos uma busca incessante por parceiros que tenham valores iguais aos nossos e complementares ao que fazemos, mas a dinâmica da solução muitas vezes exigem ações e "comportamentos" diferentes dos players nas fases que se seguem até serem finalizadas. - O segredo neste caso é adotar métricas que controlem melhor esta parceria ao invés de criar "redeas" de controle.

Don't forget alignment on ICP! If a partner is selling into a completely different demographic or Ideal Customer Profile (ICP) then it won't matter if everything lines up because the prospects aren't aligned.

Attracting new partners is largely dependent on the volume of partners your program is targeting Start by Defining your IPP >> The best way to build your IPP is by considering what criteria would DISQUALIFY a partner, & whatever the opposite of that is, serves as your IPP. Auditing resources >> Understanding exactly what resources & value you could deliver to new partners to avoid overpromising and under-delivering Prospecting Methods >> Test different methods, such as scraping lists, outbound campaigns & referrals Clear Discovery & Onboarding >> Having clear goals going into discovery & onboarding, including KPIs, EXIT criteria, alignment and ownership, timelines and v1 goal setting

The purpose of partnering is to add value for both parties, so it is important to select a partner that offers knowledge, skills, resources, audiences or influence that your organisation doesn’t already have. The relationship must be mutually beneficial in areas that expand what is possible for both entities.

Far too often, when companies spin up partnerships and programs, their value proposition is "we're the best X on the market." It's not enough. As Rob mentions, there's got to be mutual benefit. And, in most partnering arrangements there needs to be a clear path to co-sell revenue. The monetization needs outlining in the agreement, yes, the terms, yes. But, the value proposition needs to be CLEARLY understood or the partnering agreement does no good.

A partnership without defined terms is like sailing stormy seas without a compass, inviting misunderstandings and conflicts. Here are two best practices: Mutual Benefit Analysis: Ensure terms are crafted for mutual benefits, nurturing a win-win scenario for sustained cooperation. Clarity and Flexibility: Have clear essential terms but allow flexibility to adapt as the partnership evolves, fostering a positive, enduring collaboration amidst changing circumstances.

Before defining the partnership terms, take time to explore and co-create shared outcomes and a shared purpose. Without this the partnership is only transactional- not transformational. The best way to find a shared purpose is to ask: - what can we do together that we cannot do alone? - what do each of our organisations care about? Is there something we both want to impact? - how can we maximise the expertise, resources and influence of our two entities to leverage an exponential outcome? (1+1=3 rather than just 1+1=2) The people at the negotiating table will need to be disciplined at this stage so as to remain focused on defining the shared ‘Big picture’ goal rather than just getting down to brass tacks of who will contribute what.

While I agree with this in the case where to two companies are on equal standing, in reality it often doesn't work this way. Any startup trying to partner with larger long established companies simply isn't going to have this type of conversation. You will be given the option to enter their ecosystem, or not, on their terms. That said when you are in a position to negotiate being clear about creating a reciprocal relationship is key!

Ensure your potential business partner shares your vision and values for strategic cohesion. Seek out complementary skills and experience to form a well-rounded team. Verify their financial stability to avoid future strains. Choose someone open to communication and collaboration for effective daily and strategic decision-making. Perform thorough background checks for credibility and contact references to gauge work ethic and reliability. Discuss expectations clearly, including roles, contributions, and profit-sharing, and address potential concerns, such as dispute resolution and partnership exit strategies. Consider a trial project to test the working dynamic before formalizing the partnership.

Respect, honesty and transparency are far greater assets in being assured to allow the professional teams, understand what their instructions are, in drawing up documentation for the partnerships in question.

Conflicts? They're inevitable. But don't panic! Conflict resolution is your lifeline. Handle it with patience & with poise, and it can actually strengthen your partnership.

A structured exit plan is the most important aspect of a partnership agreement. If at any point during the course of the business, things are not going as per your or your partners' expectations, none of you should be able to just up and bail on the others. It's about integrity and respect for each other, but more often than not that doesn't actually mean much, especially after you've weathered a few conflicts. Therefore, please ensure that your agreement outlines: - goals / milestones that the business is expected to reach, timelines for the same; - what happens if a goal / milestone / timeline is missed; - how would conflicts between the partners be managed; - if a partner wishes to exit the partnership, what would be the procedure.

Protecting Intellectual Property (IP) in partnerships is like safeguarding the blueprint of a valuable invention—it's a critical asset that defines your competitive edge. Here are two often overlooked considerations for those new to partnerships: IP Ownership Clarity from Day One: Before getting operations underway, have clear agreements on IP ownership, covering not only existing IP but also IP to be created during the partnership. Misunderstandings later can lead to serious disputes or loss of IP rights. Regular IP Audits: Conduct regular IP audits to monitor the creation, usage, and protection of IP within the partnership. This proactive step helps catch potential IP issues early before they escalate into major problems.

Secure your partnership's intellectual property by registering trademarks for names, logos, and products with relevant authorities. Clearly define ownership and control of IP in the agreement. Incorporate confidentiality clauses to prevent unauthorized disclosure or use of IP, and non-compete clauses to avoid competition during or after the partnership. These steps are vital for safeguarding your business's unique assets and interests.

Things such as copyright infringement, intellectual property rights violation, sensitivity of company information should be addressed in the agreement, with repercussions for breaching them clearly communicated.

Use tools like BATNA, ZOPA, and NegoEco to prepare for and conduct effective negotiations. BATNA >> best alternative to a negotiated agreement - it helps you determine your walk-away point and leverage. ZOPA >> zone of possible agreement - it helps you identify the range of acceptable outcomes for both parties. NegoEco >> web-based platform that helps you manage and document your negotiations online.

While this is probably a good idea theoretically, in reality it almost never happens. Partnership agreements are generally present for when things go wrong and are updated when one partner or another changes their program and not otherwise.

To get the most out of a lawyer I’d recommend thinking through all the scenarios of how the relationship may go wrong. A bit like a “pre mortem”. You know the business relationship best, so will be able to come up with more scenarios than the lawyer. Your lawyer can then make sure that’s all covered off in the contract. Best to agree this stuff up front, whilst you and your partner have similar interest in protecting against the other eg being less interested in the partnership further down the line.

One valuable tip I got when working with lawyers was that they can not take business decisions for us. We need to decide on the (business) terms, e.g. do we want to allow an extraordinary termination right. Their job is to make sure that the contract, the legal language reflects what we have negotiated and agreed upon in business.

Establish the path to ensuring that both companies will "hold each other harmless". So often negotiations get hung up on warranty, indemnification and IP. You can overcome the indemnification component by offering to hold each other harmless + ensure you have adequate insurance. Don't just take this from me, consult with your corporate counsel. Share your experience with others.

Before finalising a partnership, consult legal advice to navigate legalities and ensure a fair, binding agreement. An accountant should review financial and tax considerations, advising on optimal structures and systems. Experts can also facilitate negotiations and mediate any disputes, safeguarding your interests and fostering a clear path for resolution. This professional guidance is crucial for a secure and strategic business alliance.

Begin with the end in mind: You always need to clearly define the exit: how does a partner get out of the business relationship? You also need to consider the ramifications of a deadlock: if you have two partners with equal voting power - what happens if a deadlock in decision making occurs? Is a buy out triggered? Or is a dispute resolution mechanism triggered?

Too often people enter partnerships with the "What's in it for me" mentality. This is unfortunately a fast path to mediocre success at best. Great partner managers go into these conversations thinking about what can they do for their partners. Providing value right out of the gate is a huge way to speed up the partnership process and leads to far more successful outcomes.

Building strong partnerships hinges on trust and clear communication. When we set clear expectations for a project or collaboration, we create a foundation for open dialogue and accountability. This helps us better understand the needs and preferences of everyone involved. By proactively addressing concerns and aligning our goals, we reduce misunderstandings, making for smoother teamwork. Setting expectations not only ensures we meet our partners' needs but also allows us to offer personalized solutions, enhancing our reputation and credibility in the process.

One thing I learned when working with lawyers was that they tend to be overly protective - if they eliminate all risks for your company, some believe they do a good job. However, you want to do business, and this includes taking (some) risks. One simple approach which helped me a lot in the past was to ask our lawyers to review the partner contract we designed as if it was given to us from a third party. Would our company sign our own partner agreement? If not, why do we expect our potential partners to sign it? Keep in mind a partnership is not transactional - it's a mutual beneficiary long-term relationship. So the contract should be written in this spirit, it should be mutual.

Always think about what you can bring to the table - How can you help your partner succeed and shine? If you focus on that, you will earn a loyal partner and a new friend. People change jobs and move around. You never know when this relationship will be fruitful again. Keep in touch with your friends.