Beware of setting up partnerships in which two or more people have equal ownership and power in decision making. If you do, you need some kind of buy/sell agreement in which one or both partners can get out at a fair price.
Rather than a traditional shotgun clause, which could leave an undercapitalized partner with less than fair market value, consider one that relies on a third-party valuation. We recommend getting an affordable estimate of value every few years to establish a realistic benchmark.
No matter how strong your friendship is at the outset, it’s good to plan a “what if” clause if things go sour. If you can’t decide on that, don’t enter a partnership at all.
