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The business has reached its peak. The remaining person will find it psychologically impossible to create new value working solo, with the knowledge that 40% of
by e1g 7y ago
The business has reached its peak. The remaining person will find it psychologically impossible to create new value working solo, with the knowledge that 40% of it will be taxed by the ex business partner. No investor will put new money into an enterprise where 40% of the cap table is not involved. You are not splitting future growth, you are now dividing present assets as this won’t be a going concern much longer.
Your options are either reduce your stake to keep the business viable for remaining parties, or sell it completely for a fair price. To uncover the hidden fair price, one person decides the share price, and the second decides if they will sell their stake or buy out the first.
- source99 7y agoThis is pretty spot on. I was on the receiving end of this and it’s incredibly challenging mentally to work hard to give away 40% to someone that just split. The comment about not being able to raise money is accurate as well. Sell your stake for a fair value and wish the new owner luck. You could keep a few percent of stock but not enough to deter potential investors.
- ghoji 7y agoIt what sense is this "given away", not "earned"?