Alex Hormozi: What I Learned After Countless Failed Business Partnerships

Last updated: Jun 15, 2023

The video is about Alex Hormozi sharing his advice on how to approach business partnerships and the importance of defining roles, responsibilities, and agreements before entering into a partnership.

This video by Alex Hormozi was published on Jun 9, 2021.
Video length: 10:19.

In this video, Alex Hormozi shares his insights on business partnerships and what he has learned from his countless failed partnerships.

He advises that partnerships should only be formed if the partner has skills, money, or time that the other partner lacks. He also suggests that partnerships should be structured as performance-based relationships with profit or revenue sharing, rather than equity partnerships, unless the partner wants control or wants to make money on an exit.

Hormozi emphasizes the importance of defining roles, responsibilities, and exit strategies before entering into a partnership.

  • Defining roles, responsibilities, and agreements before entering into a partnership is important.
  • Partnerships should be based on defined roles and responsibilities.
  • Partnerships should be structured as performance-based relationships with kickers.
  • Phantom equity is a good way to structure partnerships.
  • Partnerships should be structured with profit or revenue sharing.
  • Partners should have a clear understanding of what they are bringing to the table.
  • Partners should focus on the facts and not obsess over what-ifs.

What I Learned After Countless Failed Business Partnerships - YouTube

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Introduction

  • Alex Hormozi is sharing his advice on how to approach business partnerships.
  • Defining roles, responsibilities, and agreements before entering into a partnership is important.
  • He is open to answering questions from viewers about business partnerships.
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Defining Roles and Responsibilities

  • Partnerships are useful if one partner has skills, money, or time that the other partner does not have.
  • Partnerships should be based on defined roles and responsibilities.
  • Partnerships should be structured as performance-based relationships with kickers.
  • Phantom equity is a good way to structure partnerships.
  • Partnerships should be structured with profit or revenue sharing.
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Ugly Conversations

  • Partnerships should be based on defined roles and responsibilities.
  • Partnerships should be structured as performance-based relationships with kickers.
  • Phantom equity is a good way to structure partnerships.
  • Partnerships should be structured with profit or revenue sharing.
  • Partnerships should be based on defined roles and responsibilities.
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What I Learned After Countless Failed Business Partnerships - YouTube

Equity Partnerships

  • Equity partnerships should only be considered if the partner wants control or wants to make money on an exit.
  • Equity partnerships should be avoided if possible.
  • Partnerships should be structured with profit or revenue sharing.
  • Partnerships should be based on defined roles and responsibilities.
  • Partnerships should be structured as performance-based relationships with kickers.
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Defining Roles and Responsibilities

  • When entering into a partnership, it's important to define roles and responsibilities.
  • Partners should ask each other what they want out of the partnership.
  • Partners should agree on how to split the work and the profits.
  • Partners should consider doing profit share or equity split.
  • Partners should have a clear understanding of what they are bringing to the table.
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Severing Ties with a Business Partner

  • If the business is not making a lot of money, partners can just agree to go their separate ways.
  • If the business has debt, partners can split the debt or one partner can take on the debt and the other can transfer their equity.
  • Partners should have a conversation about what is fair and come to an agreement.
  • Partners can use a promissory note to document the transfer of equity and debt.
  • Partners should focus on the facts and not obsess over what-ifs.
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Equity and Debt

  • Equity is ownership in the company.
  • Partners can agree to split equity based on what each partner is bringing to the table.
  • Debt is what the company owes to lenders.
  • Partners should agree on how to split the debt and how to pay it off.
  • Partners can use a promissory note to document the debt agreement.
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Involvement of a Business Partner in Another Business

  • If a partner is involved in another business, it's important to consider how that will affect the partnership.
  • If the partner is not bringing in sales, it may be best to sever ties.
  • If the partner is still involved in the business, they can earn a commission on sales.
  • Partners should focus on what is fair and what is best for the business.
  • Partners should not obsess over what-ifs and should focus on the facts.

Watch the video on YouTube:
What I Learned After Countless Failed Business Partnerships - YouTube

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