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Excerpt:
The following is from the May 12, 2008, edition of The Dallas Business Journal. SMU Business Professor David Croson provided expertise for this story about 50-50 partnerships breaking up.


Growing Apart

Things at Sharon Alt's company began to unravel after she and her 50-50 partner began having fundamental disagreements about the business' future direction. With no exit strategy, it took nearly a year of tense negotiations and the help of a mediator before the partnership was dissolved.

Nearly a year after Sharon Alt unwound a 50-50 partnership to take control of her company, she cautions business owners not to fall into the trap of trusting that partners' goals will always remain in sync. . .

David Croson, associate professor in strategy and entrepreneurship at the Southern Methodist University Cox School of Business, said that "50-50 partnerships are basically two dirty words in startup formation."

Setting up an evenly split partnership without contingency plans can spell disaster for a business, which is why it's important to at least determine in advance how any impasses between partners will be resolved, he said. Those plans could include identifying a mediator to help handle disputes or set up processes where one partner can make an offer for half the business and the other one would then either have to sell their share or buy the other person out.

Read the full story.

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