One partner puts in cash, the other does the work. Give the work partner day-to-day control and the cash partner veto power over big expenses. The real question: when money runs short, does the cash partner have to keep feeding it, or was their initial investment the only commitment? Get this in writing.
Chapters
If I'm the cash partner, and let's say you went 50/50 into an LLC and you're the one putting in all the money and the other person's the one doing all the work. Okay, I presume we're going to give the person doing all the work most of the authority. They get all the day-to-day decision-making. They're maybe the manager of the LLC. They can sign on checks. Maybe they got to check with me if we're going to go into debt or an expense over $10 grand or $50 grand. There's some certain things I might want to be involved in, but I'm not in this business day to day. So I'm the cash partner. I'm more in the investor seat. Okay, well, that sounds great. Well, what happens when the business isn't doing well and we need to put $10,000 in to cover our expenses because we're short. Am I the one that puts in the money? I'm the cash partner. Do I put in $5,000 because I own 50% and the work partner has to put in $5,000? Was my commitment just the initial money I put in, or is my commitment to always be the person who has to put in the cash as we need it? So make sure you're defining that
