Loading...
Answers
MenuHow to leave a company and get what you deserve?
Answers
I am not an attorney and this is not "professional advice."
Consult a lawyer.
If you get involved with a partnership ever again, get an operating agreement in place and TALK ABOUT SEPARATING at the beginning. Get it figured out immediately. Be up front with it: "We should talk about what happens if one of us dies. Or wants to move on." It's not offensive, or confidence-gutting...it's smart (as you probably now see.)
Generally speaking, an agreed-upon independent third party firm would assess the value of the company. This firm would be named in the operating agreement provisions so there wouldn't be bickering at the time of separation.
Another typical provision is that partners have first right of refusal on share sales.
But since you don't seem to have such an agreement in place, it's probably going to be tough for you now. The more you fight the more the other shareholder is going to fight back.
Consult an attorney. Find out if there are any restrictions on selling your shares.
My guess is that with a negative cash position due to debt, the company isn't worth a whole lot. You may be able to have a value assessed based on revenue...but if you leave, how much of that goes with you? Is the business model based on repeat customers, or one-time sales? You need more expertise than a Clarity answer to solve this one.
And remember, the more mean-spirited you approach this question, the more resistance you will get.
My opinion--which again is not "professional advice" and is merely for discussion--is for you to quietly discover your options by consulting an attorney and accountant good at digital business evaluation (most are not), and wait for the company to return to profitability.
Terribly sorry to hear of the division between yourself and your co-founder/partner. I've experienced an ugly split with a partner and it's not a fun time. I'm not certain if you have a corporate attorney or not but it would be wise for the both of you to have a chat with him/her. My concern for you would be the debt (specifically to the government). As 50% owner of the firm, you are "on the hook," so to speak, and with the growing dissension between yourself and your partner, I'm inclined to believe that's a sour situation that could very quickly turn sour. If you truly want out, and this is just my opinion, I would check your Buy/Sell Agreement and strongly consider selling back your shares of the firm. Please do yourself a favor and speak with your attorney before this gets ugly.
I am involved in a similar action currently. I am negotiating a severance package (actually litigating it because the investors simply chose to not honor it).
Relationships change all the time. Divorce in business is common. First issue is to make this simply a business deal. The disagreement about the way the business has been run and, you will be aware, "borderline illegal" is 1) borderline, 2) difficult to prove, and 3) not relevant to the discussion since you just want to move on while retaining your ownership.
Key here is to keep your emotions in check and to manage the emotions of your co founder. Nobody wants a business to fall apart so make that clear. You wish them total success and cheer for them in the future.
Yes, 6 months is reasonable. They may want (you should check your corporate documents) to buy your shares back. If so, there should be a process there. You will need to have confidentiality agreements and non-competes for a period of 12 to 24 months, or as long as you are a significant shareholder.
The best advice is to tell your partner that you have come to this "difficult" decision, do not make it about him or his processes, and say "this is what I would like to do". Do not threaten or belittle anything and it goes faster, farther, and at lower cost.
You can email me at Dane@DaneMadsen.com or call me in Seattle at 206.900.5852 and I can share some thoughts.
Dane
Related Questions
-
How can one file an EIN without an SSN/ITIN?
You should retain a lawyer, or another qualified individual, to act as the third party designee for the corporation (if you do not have a partner or co-owner who is a US citizen). The designee should prepare Form SS-4 (Application for Employer Identification Number) and Form 8821 (Tax Information Authorization) for the corporation’s president to sign and return.MM
-
If I have a business idea for a large company, how can I give it to them and mutually profit, without them just taking the idea and squashing me?
Probably not the answer you're looking for, but companies have so many unimplemented ideas that the likelihood of partnering to implement someone else's idea is really low. And besides which, the idea is not something that has much value in and of itself. If you're passionate in the idea, build it yourself. That's the only way you can have leverage.TW
-
What companies have successfully implemented both B2B and B2C products or services? Which should I start with for the non-profit sector?
I would suggest the first question to ask is "what problem do I solve?" And of those people I solve problems for "who do I create the most value for?" In the non-profit world you need to add "How does my business help the non-profit run better and/or help the group the non-profit focuses on?" For example, if you've created a platform that drives donations, your company "has created a platform that helps you reach fundraising goals faster." What you don't want to do is market and sell to B2B and B2C audiences simultaneously. They have different ways of buying - a B2B audience needs to have their benefits quantified (using your thing makes me x amount more) - and it's extremely hard for a startup to be able to do both well. Better to start with one, execute really well and move into the other. Feel free to give me a call and we can dig into who your most valuable audience is.AV
-
How can I become an idea person, as a professional title?
One word: Royalties This means you generate the idea and develop it enough to look interesting to a larger company who would be willing to pay you a royalty for your idea. This happens all the time. Rock stars, authors and scientists routinely license their creative ideas to other companies who pay them a royalty. Anyone can do it. Your business, therefore, would be a think tank. You (and your team, if you have one) would consider the world's problems, see what kinds of companies are trying to solve those problems, and then develop compelling solutions that they can license from you. You have to be able to sell your idea and develop a nice presentation, a little market research and an understanding of basic trademark and patent law. The nice thing about doing this is that if you develop enough cool ideas you will have royalties coming in from a lot of different sources, this creates a stable, passive revenue stream that requires little or no work to maintain. Start in your spare time and plan on the process taking 3-5 years. Set a goal to have a few products in the market that provide enough revenue (royalties) to cover your basic living expenses. Then you can quit your day job and dedicate more time and increase the momentum. A good idea business should have dozens, if not hundreds of license contracts generating royalties. It's possible to pull this off. And it is a fun job (I'm speaking from experience).MM
-
If I have 51 percent and my partner has 49 percent of our company, what real decision making authority would I have?
On paper you have the advantage but after several startups control resides in he who knows how to execute the vision of the company.HJ
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.