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8! When I made my first comment I assumed you were younger. This may make employees less mad, due to company age but I'm still not clear why the company doesn

by edoceo 8y ago

8! When I made my first comment I assumed you were younger. This may make employees less mad, due to company age but I'm still not clear why the company doesn't just issue more shares rather than owners selling theirs. Have you been getting paid? Are you planning on leaving? Why divest?

jacquesm 8y ago
Good questions. I'm 53, have worked pretty hard all my life. It's time to pass the mantle. I've allocated 40% of the stock in my company for the people that will pull the cart, will draw down to 51% as long as I'm CEO and will then drop to 10% in an MBO when the time is right. I do not want to become a backseat driver. The consultancy arm is small and quite profitable, we do our own investments and have more work than we could reasonably deal with, and a very impressive array of customers. I've been getting paid but about 1/2 of what I was making when I was still running the whole thing by myself, I see that as an investment and as a way to make the company less dependent on me as a person. To turn a one-man consultancy into a scalable company has been a major challenge but I think we have the hard part behind us. Our profit allocation is: 1/3rd shareholders, 1/3rd employees, 1/3rd investments. That gives us plenty of opportunity to dogfood our processes, and ensures that people get paid for their efforts. > Are you planning on leaving? Not immediately, but somewhere in the next couple of years. What will happen is we will split the investment and the consultancy branches, I will continue to run the investment part and my partners will run the consultancy, maybe some will join the investment part, time will tell. > Why divest? Because of (1) diversification, (2) the stock already being issued and (3) it being more tax efficient both for me and the rest of the partners here. Accelerated vesting in case of a liquidity event has been put in place as well, there is a tax liability there but it is manageable.

by edoceo 8y ago

jacquesm 8y ago

Good questions. I'm 53, have worked pretty hard all my life. It's time to pass the mantle. I've allocated 40% of the stock in my company for the people that will pull the cart, will draw down to 51% as long as I'm CEO and will then drop to 10% in an MBO when the time is right. I do not want to become a backseat driver. The consultancy arm is small and quite profitable, we do our own investments and have more work than we could reasonably deal with, and a very impressive array of customers. I've been getting paid but about 1/2 of what I was making when I was still running the whole thing by myself, I see that as an investment and as a way to make the company less dependent on me as a person. To turn a one-man consultancy into a scalable company has been a major challenge but I think we have the hard part behind us. Our profit allocation is: 1/3rd shareholders, 1/3rd employees, 1/3rd investments. That gives us plenty of opportunity to dogfood our processes, and ensures that people get paid for their efforts. > Are you planning on leaving? Not immediately, but somewhere in the next couple of years. What will happen is we will split the investment and the consultancy branches, I will continue to run the investment part and my partners will run the consultancy, maybe some will join the investment part, time will tell. > Why divest? Because of (1) diversification, (2) the stock already being issued and (3) it being more tax efficient both for me and the rest of the partners here. Accelerated vesting in case of a liquidity event has been put in place as well, there is a tax liability there but it is manageable.