Dan Grimsrud, a mergers and acquisitions specialist in our Business & Corporate Law practice group, was interviewed on the April 19 episode of Ryan Tansom’s Intentional Growth podcast titled, “Achieving Ownership & Leadership Alignment [Part 1]: Operating Agreements, Partnerships, Long-Term Equity and Cash Flow Goals, Exit Strategies, Shotgun Clauses, and More.” This episode is the first in a new mini-series focused on aligning expectations between ownership goals and leadership roles, and discussed the purpose and core ideas of operating agreements.
“It’s setting the rules of the road. It’s creating expectations for the partners,” Dan underscores. “The parties to an operating agreement are all owners of the business. They can be in different categories, but they all have an ownership interest. And so you’re using the operating agreement to set expectations for everyone about what that ownership means for them, and to provide some certainty on key pieces. The way I think about operating agreements, or shareholder agreements, is you have four key elements: governance, economics, an exit plan, and a crisis response plan. If you talk about all of those things, and have a conversation around the expectations of the partners and those categories, I think you’re on the way to having a document that does the job.”
Intentional Growth is a podcast that gives business owners and entrepreneurs tools to view and run their companies like financial assets. This intentional mindset helps to turn the focus on building a more valuable business, and provide the choices to grow, acquire, reinvest, or exit. To listen to the full podcast episode, please visit: Achieving Ownership & Leadership Alignment [Part 1]: Operating Agreements, Partnerships, Long-Term Equity and Cash Flow Goals, Exit Strategies, Shotgun Clauses, and More