How To Survive a Business “Divorce”

McCabe Reynolds
Honest Entrepreneur
6 min readJul 8, 2015

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I originally wanted to title this post An Entrepreneur’s Guide to Surviving a Knife (in the Back). Given the tone of that title, you can see my experience was not pleasant. But this post is not about negativity. Instead, it is meant to provide guidance for those of you trying to dig yourself out of the dark and mysterious hole of a broken business partnership.

Quick Backstory
Several years ago I started a marketing firm with a business partner I had only known for a short time. Dumb, you might say? Well, not as dumb as agreeing to 45% ownership of the company. Because of his position at the company we both worked for at the time, I assumed he knew his shit. After all, the guy threw out some crazy statistics and a list of accomplishments that were beyond impressive. Reading this guy’s resume made me feel like I was going into business with the next Mark Zuckerberg. I later found his resume to be total bullshit.

So we both quit our jobs and immediately went to work. Business development came naturally to us and we were on the forefront of the SMB digital marketing revolution. We had clients all across the country and business was booming. Life wasn't perfect, but I was making good money and was really starting to see the fruits of my labor. Then, as we were approaching our one year anniversary, things changed. I discovered my partner was having random “private” meetings with our corporate attorney. He was also becoming mysteriously secretive about potential business prospects and elements of our business partnerships. I don't do well without transparency, so I started asking hard questions. I caught him in lies and confronted him. Within seven months I found myself cut out of the equation and betrayed. And being the minority shareholder, all I could do is sit on the sidelines as the company I helped build slipped through my fingers.

The Clues…There Are Always Clues
An ounce of prevention is worth a pound of cure, right? I have always tried my best to see the good in people. I have also, to a fault, been overtrusting. But remember when I said it seemed like I was going into business with the next Mark Zuckerberg? It was true, I really thought this guy was some kind of marketing savant. Looking back I was just naive, but he told wild stories about how he had dabbled in commercial real estate and was receiving job offers from companies like Yahoo. He once even said he was offered the COO position of a major news publication and that they wanted him to completely reinvent the newspaper industry. I later found out that he did indeed get offered a position with the paper as a mid-level manager.

I don't care how well you think you know someone, always vet their credentials. The most impressive people rarely brag about their skills and have a knack for just getting things done. If you smell shit but can't see it, look harder before taking the next step. Always do what you can to avoid stepping in shit. You'll thank me for that one later.

To survive a business divorce you have to develop the mindset that these low points are simply temporary situations in the grand scheme of life.

Stand Your Ground & Prepare for Grief
In my particular case, we couldn’t agree on a settlement so things got messy and we each had to lawyer up. This was a frustrating process and I learned that few people (including our attorneys) actually cared about what I was going through. My former biz partner started trying to turn up the pressure because he wanted me to sell my shares to him for pennies on the dollar. Knowing I was financially strapped with a baby on the way, he tried to use these situations as leverage. I started receiving threatening text about lawsuits and was reminded that he, not I, had the money to fight this battle. It was a personal low and was insanely stressful, but I stood my ground. To survive a business divorce you have to develop the mindset that these low points are simply temporary situations in the grand scheme of life. Additionally, you have to prepare to deal with the seven stages of grief. Losing something you care deeply about can be a very traumatic experience. It is important to that you understand your feelings and know how to deal with your emotions.

It’s a huge adjustment to suddenly stop your daily routine, especially when you're accustomed to working your ass off 10–12 hours a day.

Stay Busy & Network Like a Bastard
Hopefully your business divorce won't last as long as mine, which took nearly five months to settle. I was incredibly frustrated with the legal process. It seemed to drag on and on and on and on and on and on and on. Attorneys move at turtle speed and I don't do well being idle. Additionally, it is easy to lose track of your network and relationships during these breakups, so you have to continue networking. I remember getting frustrated by the fact that some of our clients decided to stay with my former company. One of them mentioned that, although they preferred working with me over my partner, they wanted to stick with the company because it was reputable. One week I was their most valuable asset and the next week I couldn't get a meeting. Soon thereafter I was also locked out of some vendor relationships. Looking back, this was a blessing that forced me to meet new people and vendors (many of which are friends today).

It’s a huge adjustment to suddenly stop your daily routine, especially when you're accustomed to working your ass off 10–12 hours a day. Luckily, I had a friend who let me crash his office and borrow a cubicle. I’d go in (nearly) everyday and work on building my new network and learning about new vendors. I didn't feel like I was accomplishing anything, but it kept my mind busy. It also gave me an excuse to get out for lunch, so I tried to make it a point to meet as many interesting people as possible. Although I was broke, I always bought their lunch.

Help Finds You in Surprising Places
During my experience, the best legal advice I got came from my priest and the best spiritual advice came from an atheist lawyer. Yeah, I can’t make that shit up. Here’s how it went down:

Prior to my business divorce I was going through the early stages of grief. I was in shock that someone I was so loyal to could betray me in such a manipulative way. So…I went and talked to a priest who is a close family friend. I told him my situation and he said, “Go find a good lawyer. If you don’t like that lawyer fire him and hire another one. Do this until you find the right lawyer.” Turns out, the first lawyer was a complete joke. He brushed me off for about a week or two and I hired a new, more competent lawyer.

Next came the spiritual advice from my atheist lawyer. A few days after my daughter was born I was holding her in my arms when he called. I was freaking out, because a settlement didn't seem anywhere in sight. I’m sure I was a complete shitshow and, after four months of discussion, I was wearing my emotions on my sleeve. During the conversation I was losing my mind and my baby was screaming. It was complete chaos. Out of nowhere my attorney asked me if I was a man of God. Shocked, I answered yes. His advice was to put it in God’s hands, which I did. Two weeks later the case was settled. Several months later I discovered he was in fact an atheist, which blew my mind.

For me, the best pieces of advice came from two completely unexpected sources. Keeping an open mind about who gives you advice can make a huge difference, especially if these people can offer a different perspective from your typically support group.

Keep Breathing & Rebuild
Failed business partnerships, much like divorces, suck. My business divorce was the darkest time of my life. I ignored help from friends and loved ones and dealt with some pretty heavy depression. I put my family through hell and nearly went bankrupt. Sometimes our only viable option is to keep breathing. We humans are incredibly complex beings that have an amazing ability to rebuild things that are broken. And the beauty of going through dark times is that they generate hope. Hope that, for me, would not have existed had I not gone through hell for a few short months. So today I sit here, happy and optimistic, running a new business with clients and a new business partner.

I sincerely hope you don't have to go through the same thing I did during my failed business partnership. But if you do, have faith, hire a good lawyer and keep breathing.

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McCabe Reynolds
Honest Entrepreneur

Proud dad of two awesome little girls. Co-Owner of ad agency @Agency501. Word to your mother. http://agency501.com