Dissolving a Business Partnership

Tobias Hemmerling
Founder and CEO
Montjoux LLC

Some would say that Tobias Hemmerling and Burke Blackman's business partnership was doomed from the beginning. And, if bets had been taken, those who predicted that they wouldn't be in business together a year after graduating would be right — but for the wrong reasons.

Hemmerling and Blackman became friends while earning their MBAs at the University of Colorado at Boulder. They shared a

love of the outdoors and an entrepreneurial spirit, and they decided to start a helicopter-skiing company after graduation. Together, during a business-plan course, they mapped out their strategy.

"Almost all of our professors thought we were crazy," says Hemmerling. "Everyone said the ski industry is fun, but nobody could make money at it."

But Hemmerling and Blackman were determined — more determined than most. After researching the viability of such a business in Aspen, CO, and finding out that local government and environmental agencies would not allow it, the pair rewrote their business plan and substituted snowcats for helicopters and Vail for Aspen.

While that idea was more feasible, circumstances beyond their control quickly nixed it. When environmental protesters set fire to a lodge in Vail, the chances of opening another ski company there also went up in smoke.

Still dedicated to starting a business together, Hemmerling and Blackman spent their Christmas vacation scouting new locations. Their determination paid off when they found a mom-and-pop snowcat ski operation for sale in Steamboat Springs.

Hemmerling and Blackman spent a lot of time discussing the "what ifs" of the company — and because of those discussions, they were able to weather all the setbacks they encountered. "We continuously talked about what if," says Hemmerling. "What if we couldn't find a location? What if we couldn't get a permit? What if having two MBAs running the company was too top heavy? What if an investor only liked one of us? What if we had to give up control of the company to get the business off the ground?"

With those questions in mind, the pair went looking for seed financing.

Luckily, it took less time to find financing than it did a location. Within three months of presenting their business plan, one investor offered to finance the whole venture. The only catch was that both Hemmerling and Blackman could not stay on as stockholders.

"He said, 'I'll fund your entire venture, but I only want two people with stock, and one of those people has to be me,'" recalls Hemmerling.

Because Hemmerling and Blackman had talked through this possibility beforehand, this dilemma was a nonissue for them. "I bought him out. Made it a zero sum game for him," says Hemmerling. Before buying the ski company in Steamboat Springs, they had split all expenses for the company fifty-fifty, along with the equity in it. Yet the decision was logical enough — Blackman is a hobby outdoorsman, a stockbroker by trade. Hemmerling, on the other hand, has based his whole career on the outdoor-recreation industry. He holds a master's degree in Wilderness Risk Management, is a certified Level III avalanche forecaster and has served as the operating officer for a multimillion-dollar German ski-tour company in Aspen. While Blackman's finance skills had been invaluable to the company in securing its first round of financing, it was Hemmerling's background that would successfully see the company through its day-to-day operations.

"Burke's skills will become valuable again once the company grows enough to need a chief financial officer," says Hemmerling, who would love to hire his buddy back at that time.

In the meantime, everyone is happy — Blackman gained invaluable experience in the process of raising capital for Montjoux and was offered a job to run the New Mexico office of one of the Colorado venture-capital firms the pair presented to; Hemmerling has managed to exceed the pair's business goals for Montjoux's first season; and both men felt the satisfaction of getting their business off the ground.

"We were the only venture out of our graduating class that raised funding," says Hemmerling. "Both of us believed in the venture so much, we just wanted to prove our thinking was correct."

— Susan Smith Hendrickson