Partnerships, Service, Communication & Boundaries.
Investment partnerships can be an excellent way to achieve shared goals and work together to grow a business faster with more skills and resources of partnerships. However, like any relationship, investment partnerships require effective communication and clear boundaries to be successful. Deals go south, and partnerships fall apart sometimes spectacularly with expensive attorneys fees and exhausting emotional energy. It’s important to establish clear boundaries, thoughtful communication, and discuss the divorce before turbulence for amicable splits.
Setting boundaries is a fundamental aspect of any successful partnership, including investment partnerships and client-servicer relationships. I often look to Stoic teachings when reflecting and the Stoics believe we must strive for self-mastery and control over our emotions and desires. This includes setting clear boundaries and communicating our needs and expectations to our partners. By setting boundaries, we can create a sense of security and predictability for ourselves and our partners, and avoid misunderstandings and conflicts.
For example, if two investors are partnering to fund a start-up, they should establish clear boundaries around their roles and responsibilities. They should communicate their expectations about how much time and money each partner will contribute, and agree on a plan for how decisions will be made. By doing so, they can avoid potential misunderstandings and ensure that they are aligned in their goals and vision for the company.
Effective communication is also crucial for maintaining healthy and productive investment partnerships. The Stoics emphasized the importance of clarity and honesty in our communication with others. In investment partnerships, this means communicating our thoughts and concerns openly and respectfully, while also listening to the perspectives of our partners.
For example, my personal lesson learned with this is still ongoing. There were a series of conversations prior to teaming up with two other investors to take down Memphis Section 8 rentals together. The strategy was presented, the roles of each partner were laid out, and we got to work. After three months there was a lot of inefficient activity and money ran dry, properties sat vacant, and communication consisted of missed and canceled meetings with “tomorrow”, and “next week” on repeat for simple task updates. As the funding partner I brought up my concerns, pointed out failure of communication and performance, and suggested a restructure. The team acknowledged and accepted the issues raised and we moved forward. Eventually one partner decided they were not willing to continue in the partnership and again we had a conversation to restructure and create an equitable exit.
I’ve also found in my services I often over-deliver and freely give underwriting, deal engineering, and mediation between multiple parties outside of the scope of payment and the original service agreement. This created a gross imbalance between payment and services for repeat clients, so I started to point out where things were outside of the scope, and where they were in scope to prepare them either for less service in the future, or appropriate payment and rescoping of services and expectations.
In conclusion, effective communication and clear boundaries are essential for successful investment partnerships and client-service relationships. By setting boundaries and communicating openly and respectfully, you can protect your time, energy, and investments while creating a sense of security, alignment, and productivity. By taking control of our own boundaries and communication, we can create a more fulfilling and successful life for ourselves and our partners.
