Economics
Document contributions, ownership, priority, fees, distributions, waterfalls, promotes, vesting, reimbursement, dilution, and loss allocation.
Partner Framework
Underwrite the people, structure the relationship, and document the decision.
A partner can expand access, knowledge, execution, and resilience. The same relationship can also become the dominant constraint when contributions, control, economics, and expectations are unclear.
- Format
- Framework
- Intended for
- Operating partners, Capital partners, Sponsors, Joint ventures
- Source edition
- Vista Verde Capital — Partner Framework
Partner types
- Capital
- Contributes equity or other capital and may require information, approval, priority, return, or liquidity rights.
- Operating
- Owns day-to-day or business-plan execution and should be evaluated for systems, capacity, judgment, and accountability.
- Sourcing
- Originates access or relationships; compensation and continuing duties should match the actual contribution.
- Guarantee
- Provides a financial or performance guarantee and requires clear limits, remedies, reporting, and compensation.
- Development or Construction
- Controls design, scope, budget, schedule, permitting, contracting, and delivery risk.
- Strategic
- Contributes a durable relationship, capability, market access, technology, or institutional advantage.
- Hybrid
- Combines several roles and therefore requires especially clear separation of contributions, authority, economics, and conflicts.
Partner due diligence
- Integrity and judgment
How does the person behave when facts change, mistakes surface, incentives conflict, or a decision becomes difficult?
- Track record
Which results are relevant to this role, what conditions produced them, and what did the partner personally control?
- Capacity
Does the partner have the time, people, liquidity, systems, and attention required for this investment?
- Operations
Are scopes, budgets, vendors, leasing, maintenance, resident service, reporting, and documentation managed reliably?
- Alignment
Do capital at risk, compensation, guarantees, decision rights, time horizon, and downside create compatible incentives?
- References and reputation
What do prior partners, lenders, vendors, residents, and professionals say—and what can be verified?
Contribution map
List each party’s cash, guarantees, sourcing, diligence, operating responsibility, local presence, relationships, technology, intellectual work, time, and decision authority. Then distinguish what is delivered once from what must continue throughout ownership.
Compensation should follow the contribution actually required and the risk actually borne. A title or relationship history is not a substitute for a contribution map.
Economics and governance
Governance
Define ordinary authority, reserved matters, budgets, borrowing, leases, capital work, related-party activity, bank control, information rights, and amendment thresholds.
Reporting and transparency
- Operating visibility
Agree on financial statements, bank reporting, rent and vacancy, maintenance, capital work, resident issues, insurance, taxes, compliance, and exceptions.
- Decision visibility
Preserve budgets, approvals, related-party decisions, variances, conditions, and why material judgment changed.
- Escalation
Define which events require immediate notice rather than waiting for the next routine report.
- Access
Set practical rights to records, accounts, contracts, invoices, property access, and qualified professional review.
Capital calls and guarantees
Capital-call provisions should state who may call capital, for which purposes, with what evidence and notice, under which approval standard, and what happens when a party cannot or will not contribute. Remedies should be proportionate, understandable, and reviewed before they are needed.
Guarantees require equal care. Define scope, duration, burn-off, reporting, conduct standards, indemnity, control over the guaranteed risk, contribution among guarantors, and compensation. No party should casually guarantee a risk controlled entirely by someone else.
Deadlock, removal, and exit
- Deadlock
- Define a sequence for notice, information exchange, good-faith resolution, mediation or expert input where useful, and a final mechanism that does not reward manufactured conflict.
- Removal
- Separate removal for cause from transition without cause; define cause, cure, evidence, interim authority, records, property access, and economic consequences.
- Exit
- Address transfer restrictions, rights of first offer or refusal, buy-sell mechanics, valuation, sale authority, refinancing, drag or tag rights, and treatment of guarantees and unfinished work.
Intellectual property and public work
Clarify ownership and permitted use of models, templates, systems, brand, photographs, operating data, research, and public case studies. Public transparency never authorizes disclosure of resident information, confidential deal terms, partner diligence, proprietary methods, or materials a party does not have the right to publish.
Partner red flags
- Unverifiable claims
Track record, capital, capacity, or relationships cannot be supported with appropriate evidence.
- Information resistance
Routine diligence, reporting, record access, or clear written terms are treated as distrust.
- Misaligned control
One party seeks broad authority while shifting capital risk, guarantees, or operating accountability elsewhere.
- Undefined contribution
Economics are clear, but the continuing work, time, people, or capital behind them are not.
- Related-party opacity
Fees, vendors, conflicts, or side arrangements are not disclosed and governed.
- Pressure before clarity
Urgency is used to prevent diligence, documentation, professional review, or a clear no.
Partner scorecard
| Dimension | Weight | Core question |
|---|---|---|
| Integrity | 20% | Can this person be trusted with facts, money, residents, counterparties, and difficult decisions? |
| Track record | 15% | Is the relevant experience verified and transferable to this role? |
| Capacity | 15% | Are time, people, liquidity, attention, and systems sufficient? |
| Operations | 15% | Can the partner execute and document the actual business plan? |
| Alignment | 10% | Do economics, capital at risk, guarantees, control, and horizon support compatible behavior? |
| Governance | 10% | Are authority, reserved matters, conflicts, remedies, and exit workable? |
| Reporting | 10% | Will decision-relevant information arrive accurately and in time to act? |
| Mission and reputation | 5% | Does the relationship support responsible ownership and durable trust? |
Ongoing review
Partner underwriting does not end at signing. Periodically compare actual contributions, reporting, decisions, resident outcomes, operating results, capital needs, and risk behavior with the original agreement and investment memo.
Address small misalignments while options remain. Document changes rather than relying on memory or a relationship to carry unstated expectations.
Sources and date notes
- Source editionAs of 2026-07-29
Public web adaptation of the Vista Verde Capital partner-underwriting framework.