An investment horse partnership can be an exciting and potentially lucrative venture, but it requires careful planning, clear communication, and effective management to ensure success. Whether you're entering a partnership with another individual, a group, or a syndicate, here are some best practices to follow to ensure a smooth collaboration:

1. Clear Legal Agreements

• Partnership Contract: Ensure that all partners have a clear, legally binding contract outlining the terms and conditions of the partnership. This should include each partner’s financial contribution, responsibilities, and the percentage of ownership or profit sharing. This contract should not be word of mouth, it should be in writing, and it is highly recommended that it is prepared by an attorney.
• Exit Clause: Define the process for exiting the partnership—whether that’s selling the horse, dissolving the partnership, or transferring ownership. This should include how the proceeds are split and how decisions about the horse are made upon dissolution.
• Liabilities & Insurance: Specify who is responsible for the horse’s veterinary, training, and insurance costs. Also, ensure there’s proper liability insurance in place to cover accidents or injuries to the horse or others.
• Training, Showing & Upkeep: Specify who is responsible for decisions on training and upkeep such as veterinary, maintenance, and farrier decisions.
• Financial Transparency: Ensure clear financial transparency between the parties. Determine who is responsible for keeping up with expenses, payments, and financial input. Establish a set accounting update on a specific timetable as a requirement in the agreement.

2. Clear Financial Contributions

• Budget Management: Create a detailed budget and agree on how expenses will be tracked, including routine and emergency expenses.
• Profit Distribution: Be clear about how any potential profits will be divided, whether from selling the horse, earning prize money, or breeding fees.

3. Clear Communication

• Regular Updates: Establish a communication protocol for updates on the horse’s progress, expenses, and competition results.
• Decision-Making Process: Set clear guidelines for how decisions will be made.
• Conflict Resolution: Agree on a method for resolving disagreements.

4. Define Roles & Responsibilities

• Designate a Managing Partner: One person should handle day-to-day decisions.
• Roles and Expertise: Allocate roles based on each partner’s expertise.

5. Understanding the Horse’s Career Plan

• Performance Goals: Set clear performance goals and milestones.
• Realistic Expectations: Understand that not every horse will achieve top-tier success.
• Sale/Exit Strategy: Set a plan for when and how the horse will be sold.

6. Equine Welfare & Training Decisions

• Prioritize the Horse’s Well-Being: Ensure all decisions prioritize the horse’s welfare.
• Veterinary & Health Care: Agree on how veterinary decisions will be made.

7. Risk Management

• Understand the Risks: Acknowledge that investing in horses carries inherent risks.
• Vet Checks and Pre-Purchase Exams: Ensure a thorough pre-purchase veterinary exam.
• Insurance: Ensure the horse is properly insured.

8. Marketing & Public Relations

• Media & Social Media: Discuss the role of public relations in promoting the horse.

9. Exit and Profit Realization

• Timing of Sale/Retirement: Define the conditions under which the horse will be sold or retired.
• Selling Proceeds: Determine how proceeds from a sale will be split.
• Reinvesting in New Horses: Discuss whether profits will be reinvested.

10. Regular Reviews and Adaptation

• Performance Review: Set regular review points to assess progress.
• Adapt to Changes: Be prepared to adjust roles and terms as needed.

By establishing a strong foundation of legal, financial, and interpersonal agreements upfront, maintaining clear communication throughout, and prioritizing the horse’s welfare and performance, an investment horse partnership can be an enjoyable and rewarding experience for all parties involved. Please have everything in writing and utilize the skill of a knowledgeable attorney to write your agreement.

Bridget Brandon is President of The Equine Expert LLC, a multi-discipline equine expert witness and consulting firm offering legal expert witness, consulting, and valuation services. Bridget is also the owner of ValueMyHorse LLC, providing equine appraisals, a buyer's advocate service, farm consulting, and retirement board. Bridget is also a property and casualty field agent for Marshall Sterling selling equine and farm insurance.

For more information on Bridget visit www.theequineexpert.com, www.valuemyhorse.com, or contact Bridget at [email protected] or [email protected].