A promising new business. Major funding on the horizon. A team full of ambitious plans—and almost no written agreements. Paul Sweeney shares how a client’s big promises turned into months of unpaid work, conflicting leadership, missing processes, and a business fighting to survive.

A Client Who Promised the World

Around 2015, Paul Sweeney was transitioning between businesses when a long-time client approached him about a new venture. The client promised significant funding, public-company ambitions, and the opportunity to build something substantial.

Paul was excited. He saw the potential and agreed to come on as an outsourced CFO.

But in his enthusiasm, he moved faster than his usual processes allowed. There was no signed contract or engagement letter. The client had also made numerous verbal promises to other people, despite not having the cash flow or systems to support them.

The warning signs were already there. They just weren’t obvious yet.

The Company Starts Hiring Before It Is Ready

The new company began hiring salespeople before the product was ready to sell. New employees received contracts, while members of the original team were still operating based on verbal agreements.

At the same time, there appeared to be two CEOs: the founder and a junior partner who represented himself as the company’s CEO.

Responsibilities became unclear. Compensation became a source of conflict. People disagreed about what had been promised, who was responsible for what, and how the company was supposed to operate.

As Paul tried to introduce financial discipline, he increasingly became the person blamed for pointing out the reality of the cash flow.

When Everyone Has a Different Version of the Agreement

The company brought in lawyers to address its structure and legal issues, but money continued to be spent while the underlying problems remained unresolved.

There were no clear agreements to fall back on, and the business was attempting to formalize relationships after the conflict had already begun. The lack of documentation made every disagreement more complicated because people were interpreting informal conversations differently.

Six Months Without Payment

Paul eventually went approximately six months without being paid.

The reasons kept changing: questions about whether he was an employee or contractor, licensing issues, bank-account approval problems, and uncertainty about who had authority to make decisions. Meanwhile, people were being fired, replaced, and reassigned.

Eventually, Paul’s work was reduced, and he was even asked to help interview his replacement.

The proposed replacement budget was around $1,000 per month, despite the work requiring closer to $5,000–$10,000 per month.

Paul continued trying to explain that the company could not solve its financial problems by continuing to spend money without producing and selling the product. He advised the company to stop spending, remove people who were not contributing to sales, and focus on generating revenue.

The Promise Is Not the Payment

One of the central lessons Paul took from the experience was the difference between a promise and an actual business transaction.

A promised contract is not a contract. A promised sale is not a sale. Even a sale is not truly useful until the money is in the bank—and ideally until the business has made a profit.

Paul also realized that his own expertise had contributed to the situation. Because he understood business operations and finance, he assumed he could help manage the risk. But expertise does not replace the need for basic protections.

How the Company Survived

The situation eventually improved after an independent chairman became involved and helped resolve the payment issue. Paul was finally paid, but the company had to change its personnel, strategy, revenue sources, and overall focus.

The business survived and remains public, but very few of the original people remain.

For Paul, the experience reinforced the importance of putting agreements in writing, defining scope and payment before beginning work, and establishing processes before a crisis forces the issue.

He also recommends avoiding excessive dependence on one client. No more than 30% of a business’s revenue, in his view, should come from a single client. Ideally, a company should have at least two anchor clients rather than allowing one relationship to determine its entire financial future.

Preventing the Perfect Storm

Paul compares the experience to the Swiss cheese model: risk is reduced when several protective layers exist, even though every layer has weaknesses.

A written contract is one layer. Clear responsibilities are another. Payment terms, financial controls, documentation, and client diversification are additional layers.

When none of those protections are in place, small problems can line up until they become a much larger disaster.

The lesson is not that every promising client will become a nightmare. It is that optimism should not replace process—and trust should not be confused with documentation.