Aug 11, 2025
After building a successful painting business from scratch over the last three and a half years, a New York man is walking away — but not without a hard lesson in what can go wrong when you go into business without safeguards in place.
The caller, who didn’t share his name on The Ramsey Show, said the company he started with a co-founder grew to support 12 employees and had all the infrastructure to deliver high-end home paint jobs. But behind the scenes, tensions were simmering. And eventually, his business partner crossed the line.
Advertisement
“He’s started other businesses within the same shop, taking resources from my business,” the caller explained. “Anything from putting the wrong things at the paint store on other accounts, XYZ, and sketchy checks that were cashed in his other bank account — we’re talking $6,000.”
That wasn’t just unethical, said co-host Dr. John Delony — it was criminal. “It’s called theft and fraud,” he said bluntly.
A shady operating agreement
Things came to a head when the co-founder, acting without his partner’s knowledge, had an attorney draft a 20-page operating agreement. The caller — who had never formally signed one — reviewed the document and discovered a buried clause that would strip him of any real power in the company.
“He hid a clause in there where it assigned him as the executive manager and put me as just a member of the company,” he said.
Rather than signing it, the caller lawyered up. He’s now working with a legal team and a forensic accountant to understand the complete financial picture and exit the company. He plans to sell his share back to the co-founder for anywhere from $300,000 to $600,000 — a wide estimate that has yet to be confirmed by a professional valuation.
Delony and co-host Jade Warshaw urged him not to rush the deal.
“Wait ‘till all that smoke clears before you accept an offer,” Delony advised. “You don’t know how much money’s been going out the back door.”
Advertisement
“You don't even know what you're basing it off of. And that's the hard part.” Warshaw added.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Robert Kiyosaki begs investors not to miss this ‘explosion’ — says this 1 asset will surge 400% in a year
- Vanguard reveals what could be coming for U.S. stocks, and it’s raising alarm bells for retirees. Here’s why and how to protect yourself
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Road trip or reset?
Once the caller gets his payout, he says he plans to travel across the U.S. with his ATV and visit friends — a kind of soul-searching road trip after years of burnout and betrayal. But the hosts urged caution.
“That’s your version of, ‘I’m taking my ball and going home,’” said Delony.
The caller shared that his dream is to paint luxury homes solo in a mountain town where he can also ski — a one-person business, far removed from the chaos of managing employees or fighting legal battles. Still, Deloney advised him to focus on the current situation.
“If you get an offer for $450,000, you haven’t taken out taxes. You haven’t taken out attorney's fees. You haven’t taken out assessor fees. You haven’t taken out tax fees,” Deloney said. “ And if you get an offer for $450,000 — which might be a super fair offer — you're going to feel like this partner just took $150,000 from you 'cause you just made up a number.”
Lessons for entrepreneurs
The caller’s story is a cautionary tale for entrepreneurs entering partnerships without a formal agreement.
To avoid this situation, here's what we can learn from this conversation:
- Draft an operating agreement at the outset and have a clear exit strategy.
- Keep personal and business finances strictly separate.
- Regularly reviewing business transactions and requiring dual sign-offs for major purchases.
- Using a neutral third party for business valuations if a buyout becomes necessary.
For this caller, that planning may have saved him time, stress and money. But now, as Delony put it, the priority is “just getting through it and making good choices on the way out.”
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- This 20-year-old lotto winner refused $1M in cash and chose $1,000/week for life. Now she’s getting slammed for it. Which option would you pick?
- Warren Buffett used these 8 repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Monique Danao is a highly experienced journalist, editor and copywriter with 8 years of expertise in finance and technology. Her work has been featured in leading publications such as Forbes, Decential, 99Designs, Fast Capital 360, Social Media Today and the South China Morning Post.
