Rick del Sentro, CEO & Partner at ZGrowth Partners LLC said it plainly and spot-on: “sometimes the person who thinks he or she is a business partner isn’t one at all. In my world, a business partner is someone who helps you advance the company. That is to say, they are creating value by moving the business forward. Do they need to be working in the business every day to do this? No, not necessarily.”
Private investors are presently financing 20% or more of corporate funding. But Investors are quick to assume they are forming a partnership.
Structures presently in use are based on transaction models for private equity, venture capital funds, preferred shares, and limited partnerships. I recently came across two joint ventures which failed within 2 years because of being structured as private equity funds.