Growing a business is not a one-person job. It requires one to be hardworking, patient and determined to get the best results in the long run. Not just that, there needs to be a strong team of responsible and reliable individuals who are passionate about adding value to the enterprise and working towards a common goal. Therefore, finding the right people to join you in this challenging endeavour is significant. Because a good team and the decisions that this group makes of individuals are what makes or breaks a business. No good business idea is successful if the right people are not involved.
However, finding a person who checks all the boxes on the checklist can be difficult. Before getting someone on board, there are also questions you will need to ask yourself. These questions will determine what exactly you are looking for in a business partner and how they will contribute to your business growth. Nevertheless, the world of business partnerships can get tricky, as there are a lot of different terminologies thrown around, which can be hard to understand. As mentioned before, the success of a business venture is primarily determined by team effort. But every person involved in this team has to invest a certain degree of time, money and effort to make this venture successful. Based on the amount of investment each person makes, they are assigned a particular role. Like not every person working in a company can be the CEO, as not everyone performs the same functions as a CEO. The following section will look at what an equity partner is and how they contribute to a particular firm.
Who is an equity partner?
As every business organization operates differently, the terminologies for the members used can vary. However, some terms remain constant throughout different organizations, based on the hierarchies found in a corporate setup. Ideally, the term’ equity partner’ mostly comes up in law firms.
So what exactly is an equity partner? There are two types of partners in any firm- equity and non-equity partners. Equity partners take the most risk in the venture and therefore enjoy maximum rewards. As compared to non-equity partners, equity partners enjoy more rights and freedoms. They have exclusive voting rights and are generally the critical stakeholders when taking any critical business decision. That is why having a competent equity partner in a firm is extremely necessary, as their choices shape the future of an enterprise.
Things to consider when looking for the right equity partner
Now that you realize how important the role of an equity partner is, you must do your homework before settling for one. You need to know what you require in a business partner to look for the right people who have the right qualifications. Here are some questions to ask yourself before you find the person who fits the profile-
- Make a list
You will not hand over such an important position to anyone inexperienced or incompetent. That’s why making a list of people who have been in the industry for a long time is crucial. This will help you understand the people who are working in the industry and their strategic positions in the past. Based on their experiences, you can decide who fits the role at your organization the best. While making this list, you have to keep certain factors in mind. You can check out this link to learn more about the right questions to ask the potential partners in your strategic list.
- Know what your company needs
As a board member, you must be aware of all the shortcomings and potential risks that your company can face in the future. Hence, please make yourself aware of all the strengths and accomplishments of your potential partners and how well they fit in with your company’s needs. Target the particular skill set that is best suited for your company’s profile
This is the last step in any partnership decision that solidifies the partnership in a legal binding. Take care of all the legalities necessary in this process, and ensure that your partner is ready to adhere to the treaties and clauses you lay down.