• Business, Culture, Thought Leadership

The Conversations You Can’t Afford to Avoid: What Founders Must Discuss Before Finalizing Their Operating Agreement

Far too often, cofounders skip the hard conversations at the start. Everyone’s excited, optimistic, and focused on building. But then life happens. Pressure mounts. People change. And without the right structure in place, things can fall apart fast.

If you want to build a business that lasts, you must sit down and have the foundational conversations that protect your relationship, your company, and your vision. These discussions aren’t just about legal clauses. They’re about alignment, trust, and proactive leadership.

Let’s get into the key areas every founder or ownership team needs to address before putting ink to paper.

 

1. Equity Ownership: Who Owns What, and Why?

This is where resentment quietly begins if you don’t get it right. You need to talk openly about:

  • Who is bringing what to the table (cash, time, IP, relationships)?
  • How will ownership be split, and is it fair based on risk and contribution?
  • Will there be vesting schedules to protect against someone walking away early?

If someone’s getting equity, they should be earning it. Structure it intentionally.

2. Roles, Titles, and Responsibilities

You’d be amazed how often I ask cofounders, “Who’s the CEO?” and they shrug. Clarity around leadership roles avoids turf wars and power struggles later.

  • Who makes what decisions?
  • How will authority be delegated?
  • What happens when there’s disagreement?

Define expectations before someone gets frustrated by assumptions.

  • Meeting and exceeding expectations repeatedly
  • Being dependable, especially when it matters most
  • Upholding the same high standards for every client, every time

When clients know they can rely on us, the relationship shifts from one-time service to long-term partnership.

 
3. Capital Contributions and Financial Commitment

Money is emotional. That’s why you need full transparency.

  • Who’s contributing capital now? Later?
  • Are there minimum capital requirements?
  • Will additional investments be required? If so, how will they be handled?

Unclear contributions lead to unclear expectations. Get aligned early.

4. Profit Distribution and Compensation

What’s the plan for paying yourselves? How are profits split? Will some earnings be reinvested?

You need to agree on:

  • Draws vs. salaries
  • Profit-sharing methods
  • Bonus structures and reinvestment policies

Money issues are the most common reason partnerships implode. Document your strategy now.

 
5. Decision-Making and Voting Rights  

Not every decision needs full consensus, but some do.

  • What’s decided unanimously vs. by majority?
  • Are votes weighted by ownership or evenly split?
  • What happens when you’re deadlocked?

Indecision is expensive. Empower your team with a system that moves things forward.

6. Exit Strategy: What Happens If Someone Leaves (or Needs to)?

This might be the hardest conversation, but it’s the most important one. Plan for the unexpected:

  • Can an owner sell their interest? To whom?
  • What happens if someone dies, gets divorced, or just checks out?
  • How will the business be valued for a buyout?

Think of this as your business’s prenuptial agreement. It protects everyone.

7. Dispute Resolution

When things get tense, how will you resolve it?

  • Mediation or arbitration first?
  • Which state’s laws apply?
  • What process governs internal conflict?

You can’t eliminate all conflict, but you can decide how it’s managed—with maturity and strategy.

 
 
8. Dissolution: How Would You Wind Things Down?

Even if it’s not on the horizon, you need a blueprint:

  • What triggers dissolution?
  • How are assets distributed?
  • Who’s responsible for wrapping things up?

Exits without direction lead to burned bridges and lawsuits. This section keeps things clean.

 

 
These Conversations Are Hard, but They Build Real Trust

Look—these aren’t always easy talks. But they’re the ones that make partnerships stronger. They allow you to operate from a place of transparency, structure, and respect, not just enthusiasm.

At Mavacy, we help founders not just draft agreements but navigate these essential discussions with confidence and clarity. Because a great Operating Agreement isn’t just a legal document, it’s a leadership decision.

 

 

Ready to strengthen your foundation?

If you and your partners haven’t had these conversations or if your current agreement skips over them, let’s talk. We’ll walk you through the right questions, structure the right answers, and give your business the stability it needs to scale.

Because in business, alignment isn’t automatic – it’s intentional.

Share the Post:

Related Posts