Question
After working together for almost 15 years to build a successful cloud-based business (>50 employees; >$10M annual revenue) my business partner and I agreed that it wasn't working out between us anymore (He owns 52% of the company, I own 33%; he oversaw Ops and Finance, I oversaw Sales, Marketing, Tech). Simply put, he wants to run the company like a lifestyle business (i.e. weak corp gov, minimal transparency among key stakeholders, using company funds to make large asset purchases such as a private jet, running personal expenses through the business, etc.) and I want to run the business a like growth company (i.e. strong corp gov, financial transparency among key stakeholders, raise growth capital, minimize non-business expenses). I offered to sell him my stake in the company. He made an offer that I felt was unacceptably low based on prior transaction valuations for the business (we did a redemption of investors 3-4 years ago) and comparable valuations for recent transactions in our particular market sector. In addition, he has refused to provide any financial information about the company that he has not prepared himself and given certain events in the recent past and discrepancies between the information he has provided, I don't fully trust his numbers. Since he made his offer back in January, he refuses to negotiate any of the terms of his offer and has more or less gone unresponsive to my requests for more financial information about the company (audited statements, tax returns, etc.). Naturally, I think he's hiding something. Either the company is worth more than he claims in his offer, or there is something funny in the financials of the business (misuse of company funds...?) that he does not want to be exposed. What are my options here?
Answer
Unfortunately, the best answer you can get here is "it depends." On your country and state or province and primarily on the terms of the shareholder agreement / charter and also any documents pertaining to you leaving the company. Your best option is to consult a law firm in your jurisdiction to first review the core documents and then evaluate what your potential avenues are for addressing this.
Best of luck.
Best of luck.
