Mistake No. 4: Introducing a partner without proper agreement

No matter how close you are to your partner, when it comes to business everything should be according to the apt legal procedure and with properly detailed agreements. Even the closest of relationships can be shattered due to trivial financial conflicts. "One of the biggest boons to my startup practice has been the movie The Social Network, which revolves around the litigation surrounding the ownership of the ideas, code, et cetera, at the onset of Facebook," says Gregory Kratofil, attorney and shareholder with the law firm Polsinelli Shughart.

How to avoid it: Undoubtedly, every aspect of the company must be handled with proper legal procedures and nothing should slip by without a written agreement. “Have the hard conversations now, when everybody's still in love,” says lawyer William M. Moore.