Finding a silent partner for your business might not always be easy, but it is always worth it in the end. After all, who wouldn’t want to have a partner who gives you their money while letting you run your business the way you want to? Here are the basics of finding a silent partner for your business.
The Benefits of Silent Partners
The most important thing you should understand about silent partners is that they invest money into your business just like all the other partners, but at the same time, they don’t actively participate in managing your business. This means that silent partners:
- Don’t attend meetings and don’t make any decisions.
- Don’t oversee finances and don’t review strategies.
- Don’t participate in any daily work.
Unlike active partners, silent partners, also known as limited partners, don’t actually have a say in running your business. Such responsibilities are left to you and your active partners – if you have any, that is. Consequently, this means that you get a fair share of autonomy when you have silent partners involved with your business financially.
Silent partners get partial ownership of your company for sharing their financial resources with your business. They can only lose the amount of funding that they have contributed. Nevertheless, there are still some things to keep in mind about such a relationship.
Both you and your silent partner will greatly benefit from such a situation, but only if you both trust each other. You will need to find a person who you can rely on and who will trust you just as much with managing the business that they invest in.
The Differences Between Silent Partners and Other Types of Partners
To understand the role of silent partners, Keystone Investors Club gives good ideas to look at how other types of partners function and how they compare to silent partners. Here are some examples to give you a clearer idea:
- General Partners: You could say that general partner and silent partners are almost complete opposites. General partners can be either groups or people who invest in your company as well as being directly involved with managing your business. This means that they are involved in the day-to-day processes, making important decisions, and so on. However, because of this, they are also less protected financially and can be responsible for your organization’s debts and liabilities.
- Secret Partners: Sometimes, the terms “silent partner” and “secret partner” are used interchangeably, and though they do have similarities, they are actually different. Both general partners and silent partners can become secret partners. This means that while they will be involved with your business accordingly – general partners both financially and in day-to-day operations while silent partners only financially, – the general public will not be aware of their involvement with your company. This involvement will, therefore, be a private one.
Things to Keep in Mind When Looking for Silent Partners
Now that you understand how silent partners function, there are still some things you need to keep in mind when looking for silent partners. These are just some technicalities that are, in fact, quite important.
For starters, your partnership agreement will need to be well-written. You could hire a professional writer that you could choose from Online Writers Rating or elsewhere in order to ensure that they have the experience and knowledge necessary to create such a document.
The partnership agreement will need to, of course, satisfy both parties, so make sure that both you and your silent partner are content with it. All the roles, responsibilities, and expectations will need to be clearly defined in order to avoid misunderstandings. More often than not, once the agreement is signed, silent partners will make an investment and step back.
Best Practices for Finding Silent Partners
So, how do you find a silent partner for your business? Here are the best practices of looking for and finding silent partners that you can use:
- Develop a Business Plan: Developing a business plan is perhaps the most important step in managing your business right. Besides, you will need to show your business plan to any potential investors in order to persuade them to give their money to you. Try to show that your company will be effective in doing whatever you have set out to do and that your expectations are based on facts and past statistics.
- Start with The People You Know: Get in touch with the people you know such as your friends and family. Your colleagues can also be potential silent partners. These are the people that know you enough to trust you and you know that you can rely on them. And this kind of knowledge about your partners is essential for your partnership to work out.
- Turn to Angel Investors: Angel investors love funding projects during their early stages of development which means they will be more likely to become a silent partner for your company. It is fairly easy to find angel investors online too because there are huge directories with them that are easily accessible.
- Set Realistic Expectations: Investors are looking for businesses with a lot of potential and a bright future ahead of them. However, you will need to set realistic expectations for your business. Nobody wants to be lied to or deceived into investing their money in a failing startup. Try to answer as many questions your investors have as possible. And don’t look shady!
- Be as Clear as Possible: Always clearly outline how much money you are looking for, how much you are planning to earn, and any other expectations you have and what these expectations are based on. Conduct surveys and market analysis to have a lot of data on your hands that you can use to make such predictions as accurate as possible.
Conclusion
All in all, attracting silent partners is not as difficult as it seems as long as you have a clear plan and you are determined to find such partners for your business. Follow the advice in this article to find your silent partners and start your business on a good note.
Gregory is passionate about researching on new technologies in both mobile, web and WordPress. Gregory in love with stories and facts, so Gregory always tries to get the best of both worlds.
