Our new potential business partner wants more equity. Help!

Dear Aunty B,
My partner and I have been in a very successful business relationship for four and a half years. We now want to ramp the business up and have been talking to a third potential business partner with the eye to that person putting in some cash and spearheading a major sales effort and channel building exercise.

The problem we are facing is the person who comes from a sales background keeps negotiating the deal with us. We finally think we have signed off on the deal when he has comes back with something else he wants added. We have accommodated that as part of negotiations. But late Friday night my business partner had a phone call from him when he asked for more equity.
My partner now wants to pull out but we are so close to the finishing line and my feeling is that we should keep negotiating. Is this the normal argy bargy of this type of deal and should we persist?
Lou, Vic.

Dear Lou,
Pull out now. Fortunately for you, this person has revealed his true colors before you walked down the aisle. Lou, you don’t just take on a business partner. You marry your business partner in a weird sort of business ceremony. So you spend the time before the marriage getting to know them. What are you looking for? Well, what do you look for in the person you are going to marry? Are they reliable, trust worthy? Do they stick to their word? Are they capable of seeing the long term? Are they going to act in a way that has the best interests of the partnership at heart not their own interests?
Given the fact that he keeps moving the finishing post and at the last minute he is trying to close a deal in his favour, I suspect that many of those boxes are not being ticked.
You need to do several things: ask yourselves do you trust him? I suspect you would say at this point, no. Secondly, ring some of his contacts: people he has been in business with. What is his reputation like?
Third: does he understand what a business partnership is? Can he ever transition from a sales role? Probably not.
It is far more important at this stage to start the search again than propose to someone that you are not sure you even like.

Good luck!
Your Aunty B

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