What your business can learn from WAR DOGS

I watched WAR DOGS this weekend. This movie was a bit wild but like always, I couldn’t turn off my legal mind.  Spoilers y’all! The premise of the movie is that two young men had a business that bid for government contracts for weapons. 

 First Point: The two men enter into a lucrative business relationship, but because they are friends they do not seek out a partnership agreement or contract regarding the distribution of funds or company ownership.  

Second Point: In the movie we see the men underbid their competitors by millions essentially leaving money on the table. This is due to a lack of research and preparation. In business you have to know what your competitors are doing and the value of what you are offering. 

Third Point: When the new hire asks what the company's name "AYS" stands for the owner was unable to answer any inquiries regarding branding. Your company can have tons of intellectual property and branding.  

Fourth Point: Eventually one of the partners recognizes that there is a need for a partnership agreement and writes up an agreement that reflects their 70/30 split relationship and has the partner sign the agreement. Now creating a partnership agreement sooner rather than later is good. However, he would have been better served to have an attorney draft his agreement because they would have ensured that he was compensated if he were to leave the company (which is an issue later). 

Fifth Point: This movie highlighted the importance of filing and keeping your paperwork and your contracts. When you create an agreement with another you should copy that agreement and have multiple copies. In the movie, as the partnership was dissolving the other partner destroyed the only copy of the agreement and so there was no evidence of their partnership agreement. Furthermore, there were no witnesses present at the time of the deal. This meant that the partner leaving was at a distinct disadvantage to the other partner and would most likely have to sue and prove by the nature and previous actions of their relationship he was due consideration and compensation from the company upon him exiting. 

Sixth Point: Whether you are the sole owner or have partnership, you should have an exit plan for your company via operating or partnership agreement and it should be reviewed and updated.  

Seventh Point: Within the movie, the partners had a local businessman that provided funding and in exchange, he received a percentage of the profits from the contracts. However, the partners were very dishonest about the amount of money the business was bringing in. Again, there was no contract or agreement in place that would allow this businessman to know the profit. This shows how you should be careful with whom you work with and do your due diligence.  

Eighth Point: The lack of accounting and bookkeeping within this movie was rampant. Invest the time to know your finances, invest and take care of your money. Knowing your money can get you more money, and make you eligible for more opportunities including grants and investments.  

Lastly, don't cut corners and be honest. Do business ethically and build a reputable reputation for your brand and business. 

This movie truly highlights why you are never too "small" to have an attorney for your business.  Retroactively trying to find an attorney or prepare for opportunities is so much more difficult when you are moving and expanding. Often your business in one contract, one client, one viral post, one interview form going to the next level. Protect as you build.