Tennessee startups and joint ventures require special planning. Among the other facets of starting a business, one must also consider the relative value of each person's contributions in the past, present and future. Assigning relative value is simple because individual perceptions may color how contributions are weighted. This step is important to preventing potential problems or legal disputes later, but is frequently overlooked in the planning process.
For example, two people entering a partnership may elect to establish equity at 50 percent each. However, the partner who had the original idea may be considered more valuable to the company, because without the idea, the business would not exist, which might change how interest is divided. In addition if on partner is established as CEO while the other remains at arm's length as a consultant, this would change the equity equation.