Seinfeld on Startups: We Had a Pact!
“We Had a Pact!!!”
George’s famous line was often used to channel his aggression at Jerry for his engagement “predicament”. It all came about after “The Speech” at the coffee shop when Jerry and George realized their lives were headed nowhere and it was time to become “men”.
Out of this, “The Pact” was born. Essentially, they both agreed to get married. Sounds simple. Shake hands. Find a willing partner (which isn’t so easy if you know these 2 idiots very well). Get married. Done. As Lee Corso would say, “Not so fast my friend”.
Now George and Jerry have been friends since forever, dating back to high school. You would think if two people could form a partnership and see it through, no matter how stupid the idea, it would be these two. They find several ways to screw it up, and in the end, neither is married and its up for discussion if they really ever become the “men” they set out to be after that fateful day at Monk’s.
You’re either wondering where I am going with this or you got sucked in to Seinfeld videos on YouTube. For those of you who are still with me, the implications from “The Pact” should be obvious. Pacts- or partnerships – can be scary business. More often than not, they end in disaster. Even if the partners get along, seldom do their spouses, children, etc. Someone is always feeling cheated, short changed, ignored, etc.
My advice isn’t to avoid having a shared ownership structure, but rather to spend a lot of time on the front end getting your legal structure nailed down and talk through how you will handle disagreements. As sure as Costanza is cheap and chunky, they will happen. Having a plan in place on how to deal with your business’s “predicaments” will save a lot of headaches and quarters in the swear jar.
As soon as you think that you and your business partner are too good of friends or too close of sisters or whatever to let business decisions come between you, you are already doomed. There are numerous examples of friend and family business splits, spend a few dollars on the front end with an attorney rather than going the route of a pinky promise – those rarely hold up in court.
Dan Beenken, Director of the UNI Small Business Development Center
