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.
The founder accepted below-market pay for years based on a vague verbal promise to be "treated right" later. This lack of specific terms for his sweat equity ultimately left him with no leverage and no payout, turning years of hard work into a costly lesson.
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.
Believing the business would one day be his, the founder paid for hotels, tools, and other company expenses from his own pocket. This personal financial over-investment, without any formal ownership, is a red flag that you are acting like an owner without being compensated like one.
The founder's partnership allowed him to build a company without shouldering the initial financial risk. This "halfsies on risk" structure meant he never had true control or ownership, ultimately capping his upside and leaving him with nothing. To get the full reward, you must take the full risk.
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.
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.