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Revolve Nation Meetup March 14, 2012 Recap: Partner Woes and For- vs. Non-Profit Strategy


The Revolve Nation Boston Entrepreneurs Meetup is the largest community of entrepreneurs and small business owners in the city of Boston, offering networking, discussion groups, seminars, business plan hot-seats, and more. We meet every two weeks on Wednesday nights to network, socialize, learn, and promote a thriving community of entrepreneurs.

1. How Can I Reign In a Wayward Co-founder Without Damaging the Personal Relationship?

Several members brought up the topic of how to either remove or rehabilitate a co-founder or partner who is posing a problem. The twist on this classic problem is that this co-founder is often a good friend. Can you eliminate one relationship without harming the other?

The group offered many insights into both preventing and dealing with this problem. Prevention in this case means planning as a team. This verifies that everyone has the same vision and also generates the good ideas you’ll need to make progress. One member suggested that each co-founder describe their absolute best case scenario, both for the business and in their own personal life. The visions for each founder should align, if not match, to avoid a split. And because life changes quickly, check-ins are necessary to make sure that the visions are still on track.

But if you’re past the planning stages and divergence has begun, corrective action has to be surgical. The goal is to remove the harmful attitude or incorrect vision from the business, but keep the individual as a friend, just as surgery aims to remove harmful tissue and leave the healthy tissue behind. Members suggested a full range of options, such as trying to split the business amicably, limiting the co-founder’s role in the business, or offering to buy the co-founder out of their interest. But because this is so fact-specific, it is hard to give meaningful advice in this brief recap!

2. Should I Launch as a For-Profit, Non-Profit, or a Blend? What Are the Pros and Cons?

One of our members is considering a non-profit launch for several reasons, although the business plan could accommodate a for-profit or non-profit model. The concern was whether this would raise serious fundraising obstacles, and how those could be overcome. Also, even with those obstacles, could the non-profit status lend enough credibility to the business that it would effectively make no difference?

The group suggested that while traditional investment is either unlikely or impossible for non-profits, money is out there in different forms. People are often happy to donate to a cause that has affected them personally, and any non-profit needing funds should start by asking for help from people who are close to the issue. Some for-profit enterprises are also happy to sponsor events and programs that non-profits manage, either to buy goodwill in the community at large or even among a very specific subset of a community. If you can find businesses that are in your industry, they may become strong allies rather than competitors.

Lastly, the group offered up hybrid models for consideration (and we’re not talking about L3Cs and B-Corporations), where a business has affiliated for- and non-profit dimensions. The nonprofit serves its target population and is funded by the related for-profit entity. In some cases, the customers of each may be indistinguishable except for income differences or types of services rendered. For example, hospitals commonly charge most patients for services, but will provide some free care to the poor.

The final tip for those considering a non-profit launch is to seek out grant writers as a first step. These people are familiar with the most fruitful funding sources like foundations and state and federal grants, and can tell you what the market is like for donated funds in your industry.

If you want to hear more or throw in your two cents, join us at Meetup!

You can contact the author here, and follow @revolvethis and @gerritbetz on Twitter.