Entrepreneurs spend a great deal of time thinking about opportunities.
Markets.
Margins.
Products.
Capital.
Customers.
In my experience, one of the most underestimated variables is the partnership itself.
Who are you building with?
It sounds obvious.
It rarely is.
A transaction can be financially attractive and still create a poor partnership.
A partnership can look unconventional on paper and still create tremendous value when incentives, capabilities and expectations are aligned.
Over the years, I have become less interested in simply asking whether a deal works.
I am more interested in whether the people around the deal can work together.
Alignment is more valuable than symmetry
Business structures are often designed to look neat.
Equal ownership.
Defined roles.
Clear governance.
Those are useful.
But structural symmetry does not guarantee alignment.
Two shareholders may own the same percentage of a business and have completely different views about time horizon, risk, reinvestment or exit.
Conversely, partners with very different ownership stakes can be exceptionally aligned because everyone understands what they contribute and what outcome they are working toward.
Good structure should reflect reality rather than disguise it.
Capability should determine the partnership
NUVO does not need to own every capability internally.
Sometimes another company already has the technology.
Another partner may have customer access.
Someone else may have the operating team.
An investor may have the most appropriate capital.
A founder may understand the market better than anyone else.
The question then becomes:
How do we put those pieces together?
That mindset is increasingly important to how we want NUVO to operate.
We are comfortable building a company ourselves.
We are equally comfortable acquiring, investing, partnering or bringing specialist capability into an opportunity where that creates a better business.
Good partnerships require difficult conversations early
The easiest time to agree with someone is before anything has gone wrong.
That can create false comfort.
Partnerships should be designed for difficult periods, not only successful ones.
What happens if more capital is required?
Who decides?
What happens if one partner wants to sell?
What happens if the operating founder is no longer the right CEO?
What happens when the business misses plan?
What happens when a new opportunity appears?
The best time to discuss these questions is before they are urgent.
Trust matters, but governance still matters
Trust is essential.
It is not a replacement for governance.
Clear agreements protect relationships because they reduce ambiguity.
Roles should be understood.
Decision rights should be clear.
Information should flow.
Performance should be visible.
Partners should know what good looks like.
Good governance is not bureaucracy for its own sake.
It creates the conditions for trust to survive pressure.
The goal is a stronger business
The simplest test I apply is this:
Does this partnership create a stronger business than either party could create alone?
If not, there is probably little reason for it to exist.
If yes, the next task is to structure the partnership so everyone is incentivised to continue creating value.
NUVO's next chapter will involve more partnerships, not fewer.
Operating partners.
Founder/operators.
Capital partners.
Industry specialists.
Companies we invest in.
Businesses we acquire.
That makes alignment one of our most important capabilities.
Capital matters.
Opportunity matters.
But over the long term, the people around the table usually determine what happens to both.
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