There were these two gentlemen seated opposite one evening, seeking my services in shedding more light about the ways and means to connect, collaborate and commence a business venture, and before they begin to embark on this journey, they thought it prudent to engage a startup consultant for guidance and directions. Well, it was very wise of these two to do some spadework right before the start, and not as an afterthought after inception.

So I say, “Gentlemen, I understand you want to set up something of your own. Fine. Is there a MoU ready?” Both erupted “Memorandum of Understanding? but that’s an agreement Naveen. We haven’t even started and you refer about MoU? That’s premature and preposterous in the present scenario. Please place it in perspective”. I agreed “Fair enough. Let’s deliberate”.

It’s not just these two, but most of us get it wrong. We are so familiar with the acronym MoU but fail to fit in the frame in our own premise but prejudiced in understanding that it’s a formal agreement between a vendor and client or a pact signed up between two entities. Why shouldn’t there exist one between two individuals within the same organization, for instance between these two budding entrepreneurs who are soon to become business partners. Puzzled and perplexed, they sit still, but quite sarcastic in expression while awaiting me to articulate.

In easing their tension, I reminisce and take them to my good old days. It’s easy connecting through anecdotes and I narrated something from my personal experience for them to empathize and easy to relate. As a boy I was always mystified by the rainbow – the seven colors and the beautiful arc that starts from one end of the sky and curves into the other, and shout with joy “mom, look rainbow” and my mom running her hand through my hair so lovingly would share “where it ends lies the pot of gold – prosperity”. With childhood innocence and ignorance, I would ask “why can’t we have our home there then?” She would smile but chide me “child, don’t dream, but work hard and you will prosper”. It was the 7 colors then. The Rainbow!

The two gentlemen were by now interested but then again intrigued as to where this ‘7’ was leading. I sensed and summed up:  “Do you have the Rainbow with you? You guys have got together but have you signed a MoU between yourselves during initiation, and before you question me again about the relevance, hear me out and then I will answer all your questions and address the concerns. Listed are the 7 salient and most significant statements as a ‘must have’ in your MoU:

Vision: Definition of the reason and rationale in initiating the business in the first place.
Individuals: The background of the people/partners coming together
Bringing: Contribution in terms of time, knowledge, investment that each Business Partner on board could bring to the table.
Get: Expectation/Return on investment for the principal stakeholders (cash and/or equity).
Yardstick: Definition of short and medium term goals to accomplish as a team.
Objectives: Articulation of Business and Personal Goals
Roles and Responsibilities: Donning, defining, and discharges duties aligning with accountability and achievement

Forewarned is forearmed. Good for you that you came on time which proves a stich in time saves nine, but how many  amongst ourselves have the clarity to communicate to the stakeholders and promoters? If the vision, ownership, rights and responsibilities aren’t black and white, how would they translate their efforts to results? So often what applies for others and outside the ambit of our organization is never applied within. Like charity begins at home, correction too starts from the self. Hope you two too got something from this conversation.”

The discussion was over.

When they shook my hands to part ways, one remarked, “we understood the significance of the MoU. Thank You. By the way, your mom was right. At the end of the rainbow, there indeed lies the pot of gold”. I smiled. Yes, Mothers are always right. And the other added, “may be other wannabe- entrepreneurs too might find this a guaranteed guideline – please do spread the word around.”

Today, they are thriving and often touch base with me, and never miss an opportunity to remind me of the Rainbow!! It did add colors to their life. Surely so.

“Whenever you face a difficult problem, never say, “Oh! God, I have a big problem!” but smile and say: “Hey Problem, I have a big God!!”

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