People often are drawn to partnering with a long-time friend for various reasons. However, while that can many times be a good decision, you still need to think carefully and ensure that you aren’t just making this decision because it will be “fun” to start a business with your bestie, or out of a misplaced sense of “duty” to your friend. If you make business decisions putting the interests of your friends over those of your company…well, sometimes those choices might come back to bite you.
It is with those thoughts in mind that I direct you to the story of Gearbox Software’s co-founder and CEO Randy Pitchford, and Gearbox’s former General Counsel and Vice President of Legal Affairs, Wade Callender.
It all started innocently enough, with Pitchford and Callender growing up as childhood friends in Maryland back in the early 1980s. However, the two went to law schools on different coasts, and up until their reuniting in 2010, they lived separate lives and became very different people. Maybe Pitchford thought it was going to be just like old times when he brought Callender into Gearbox.
According to Callender, things went fairly smoothly for the first few years. After that, there are many accusations on both sides. Callender claims that Pitchford misused company funds, belittled Callender for his Christian beliefs, and other interesting claims, such as one about Pitchford allegedly leaving a USB drive containing sensitive Gearbox company information and his “personal collection of ‘underage’ pornography.”
Of course, Pitchford denies these accusations, saying that Callender is the real villain of the story, and claims that he wasted company funds on a variety of questionable expenses, including first-class tickets, personal expenses, and vacations, and even making a $17,000 payment to retain the attorneys that he hired to sue Pitchford…using his Gearbox American Express card, which he never repaid the company.
Now, we don’t need to get any further into this case here on this blog because the allegations themselves are what is important. Think of your best friend in the world. Now imagine that he (or she) and you are partners. Now imagine that the friendship sours, and that person sues you regarding the business. Do you think that friend has enough knowledge of your personal and professional life to open a big can of worms like Pitchford and Callender did to each other? Just as with a divorce situation, it’s often our best friends who can turn into our greatest enemies. They know the secrets, the weaknesses, the soft spots.
In short, it’s something that you should consider when deciding whether to partner with a “trusted” friend. Ask yourself, “If this person turned on me, would they have anything they could use against me?” As we all know, even great friendships can be ruined when money becomes an issue. Sometimes, it’s better to have a partner who has a little bit of “distance” from you on a personal level. This same advice can ring true if you become close after becoming business partners. Remember, secrets can result in sabotage. Keep it clean, professional, and “ammo” free.
This Blog was written by Hunter Business Law’s Founding Partner, Sheryl Hunter, Esq.
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