The founder’s 76-year-old partner, having been "screwed over" in past deals, acted out of extreme self-preservation. This past business trauma led him to prioritize his own financial security at all costs, even if it meant reneging on promises to his trusted partner.
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In today's founder-centric climate, many VCs avoid confrontation to protect their reputation (NPS) within the founder network. This fear of being blacklisted leads them to abdicate their fiduciary duty to shareholders, failing to intervene even when a company's performance is dire and hard decisions are needed.
A key warning sign was when the founder's business partner stopped communicating with him directly and began consulting his accountant instead. This communication shift signaled a change in priorities from collaborative building to self-interested financial maneuvering before the exit.
The ambition to land big-name clients can be fueled by a subconscious need to prove doubters wrong. This reveals a deeper motivation: an ambition driven by a "wound of wanting to feel enough" rather than pure business strategy, which can lead to misaligned partnerships.
Despite risking his house with a $150k line of credit, the founder's primary motivation was not wanting to disappoint his first clients. These early believers put their own reputations on the line, creating an obligation more powerful than the fear of personal financial loss.
Kevin Bartlett's story shows how relying on a handshake deal with a trusted, older partner led to a complete loss of his expected multi-million dollar exit. Good intentions and personal relationships are not a substitute for formal contracts when business stakes are high.
A key stakeholder within a client account may actively create friction and gaslight your team, not for legitimate business reasons, but to steer the contract towards a competitor where a friend works. This form of psychological warfare can derail renewals despite strong performance.
When smart partners think the other is an idiot, it's often due to a 'base assumption collision.' Each person operates on a different fundamental, unspoken belief about reality ('the world is X'). Identifying and discussing these hidden assumptions is key to resolving otherwise intractable conflicts.
A rising tide lifts all boats. The true test of a founder partnership emerges during downturns. Diligence should focus on teasing out traits like adaptability, humility, and accountability, which predict how a founder will react when plans inevitably go awry.
When Kevin attempted to buy the company he built, his partner inflated the valuation. The partner knew Kevin was emotionally invested and understood the business's true potential, using that knowledge as leverage to demand an overpayment, a common tactic in internal buyouts.
Home Depot's founder, Bernie Marcus, walked away from a crucial $2M investment from Ross Perot over minor control issues, like what car he drove. He prioritized partner alignment over immediate capital, believing a bad partner would inevitably doom the venture, regardless of the money.
