Forums: Discussions for entrepreneurs and small business.

Hi James,

I`m not going to touch on the accounting portion of your question other than to recommend talking to a start-up accountant.  But I will give my opinion on your general strategy.  I`m opposed to it if you think you will ever be raising outside funds. 

No investor wants to deal with complications of someone owning that much equity and not having anything to do with the company.  Your married, so she`s involved by default.  

Picture it from an investor`s point of view.  His reply might be something like: "Marriages fail 60% of the time.  I`m sure your`s is rock solid, but that`s what everyone tells us and we`re not prepared to be burned by an irate spouse that owns 50% of this business.  Buy back your half and come back to talk to us, until then we`re not interested."

That`s hard to hear, but I`d bet my savings that you would hear it.

I think it is not a wise decision to have partners involve in the company when they cannot commit to it full time. Moreover, relationships can sour at any moment and I don't think you wish to put yourself in the risk of destroying the business in the event both partners cannot see eye to eye in business decisions or personally.

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