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Seven Greatest Ideas for Taking the Plunge

Idea 2 - Choose an arbiter or an assertive mentor

Suppose you have decided to go with two people, the next decision is whether the
partnership is equal or if one of the partners is slightly more equal than the other.
Some venture capitalists who have worked with many start-ups have come to the
conclusion that every team needs an identified leader. They advocate, for example,
that in a limited company the shares are not split 50/50 but one shareholder is given
the edge, even if it is only 51/49. That way, they claim, if it becomes necessary to
arbitrate between two courses of action they both know in advance whose opinion
will hold.

But some successful entrepreneurs, whose experience is that the 50-50 split can
work well, dispute this. One such, the long-term thinker of the duo, says that even
the smallest edge would have lessened his ability to argue his case, and the 'do it
now' merchant would have forced through mistakes. He went on, however, to re-
veal that there was an arbiter, or at least another person involved in the decision-
making process. This person played the role of non-executive, and low-paid, chair-
man. During planning sessions, Idea 85, the chairman would force the two people
through a route of logic that would often reveal to the more impetuous of the two
that the way forward he was advocating was not right for the business as a whole.
Indeed this became such a feature of the behaviour of the team that he would often,
at the end of such a discussion, turn on his partner in mock rage saying 'There you
are, I told you it wasn't a good idea' - his wayof backing down.

If you are doing the whole thing on your own, make sure you have built in at
least a simulation of this arbitration. It doesn't matter who it is, your accountant,
your spouse, your eldest child or your bank manager; have someone in whom you
confide and who can tell you to your face that you are about to drop a clanger. (On
second thoughts probably not your bank manager. As we will see, they are more
concerned with avoiding trouble and potential bad debts than encouraging the green
shoots of commerce. If the business takes three years really to get going and prosper,
they will have moved on before it happens.) Robert Townsend, the ex-CEO of Avis