Hi all, I'm on a 4-person team building a site we hope to monetize in the near future. We believe in the idea so much that we've incorporated. Currently we're just starting out and things look promising, but there's one person on the team (the one whose idea this was) that constantly micro-manages, freaks out on the smallest of things and takes things personally. He constantly complains that he doesn't get appreciated for the amount of work he does, yet he refuses to relinquish control of certain tasks for us to help him out. We've tried to help him delegate the workload so he doesn't get stressed out all the time, but time and again he meddles and gets upset when things don't go his way. It's almost like we're dealing with a child. This person has threatened to quit if he doesn't get his way on more than one occasion and the rest of us are ready to take him up on the offer if he does it again. I'd like to get some ideas on what our options are for buying this person out/getting rid of him. He has the most shares in the corporation, but between me and the other 2 team members we have a majority vote. We don't have a lot of money put into this so far (less than 5K), but he may come up with some ridiculous buyout number if we decide to force him out. Since I'm not the business expert in the group (he is), I'd like to get educated on what my options are in situation like this. I don't plan to do it at this moment, but I'd like to arm myself with the knowledge. Thanks in advance for any input!
I would suggest phoning a small business helpline. Many of them will be happy to offer free advice as to what your options are over the phone. I've never had personal experience with it, but it sounds like he's either very passionate about what you're doing, or he's an immature dick. There can be a thin line a lot of the time.
You cant buy him out unless he wants to sell. And he does sound like he will ask for a $xxxxx+ amount just to be a jerk....But if you set him down and tell him your plans maybe he will agree?
Yes, it does seem like we need to agree on a buy-out strategy. We should have done that before we incorporated, but hindsight is 20-20. All I really wanted was to know what needed to be done. We don't plan on kicking him out just yet -- we'll give him another chance. Perhaps when the current episode (one of many) has smoothed over, we can start discussing this and mutually agree on how a buyout can be done. After it's in writing, if another blow up comes up we know exactly what to do.
Its impossible to say without knowing exactly what the venture is, but rather than buy him out why not just all quit? If you've not spent much already, it might be a cheaper and more viable option. Then just create a new company, set up a bank account etc, with the guys that you do want to work with.
Just keep in mind when approaching him with the situation that you need to make it look like it benefits him. If you go to him simply saying "I hate you" then he may not likely do it. All in all, it is up to him to set the value of the idea.
Hmm...the option about all just quitting is actually quite valid. You see, we created the corporation just recently, and it doesn't actually own anything yet. All it has is the four of us on the board of directors. The website and hosting is still under one of the partners' names. We could technically all quit and still keep everything. In case you were wondering, it's a facebook app that we have created. It's actually got a utility to it rather than being another mindless nuisance. It is really sad that it has come down to this. The premise is great, and the working relationship between 75% of us is fine -- it's just the one bad apple that makes it hell.
Since the idea was his I don't think it will be as easy as dissolving the corporation and the rest of you capitalizing on that idea. The idea is his and it is up to him to determine that value. The rest of you can buy the idea if you want, otherwise it is his. Tom PS: I'm not a lawyer, nor would I play one on TV, and I have never stayed at a Holiday Inn Express.
I'm not a lawyer either, but as far as I know he has to prove it's his idea (if he wants to take it to court)... How on earth will he be able to prove that? I wouldn't do it without offering to buy him out first, because it's beyond my ethics, but if he's really being a jackass, just to be a jackass, I could go on the path of dissolving and starting another company.
Thanks for the responses guys, So my planned course of action should the final boiling point come up will be: 1) Discuss with him a buyout price. Either we buy him out or he buys us out. 2) If he gets unreasonable, dissolve the company and start a new one without him. There is absolutely no way for him to prove the idea was all his. The original seed of the idea could be his, but we all had a hand in shaping and developing it to where we are today.
Umm. . .if he's the guy that came up with the idea (meaning, he has the business vision) AND he's the business expert, how are you guys going to survive without him? It reminds me of the movie "That Thing That You Do", where the lead singer quits the band. Although the rest of the members can still play their individual instruments, the band can't survive without its lead singer
We know we probably won't be as successful without him, but we also know we can survive without him. He's actually threatened to quit 3 times already, and we've persuaded him to stay on all those times. It's gotten to the point where we're willing to give up potential extra cash so we don't have to deal with his tantrums. It's really like babysitting -- spending hours listening to him talk about how we're not as dedicated and how he's not appreciated, when that time could be spent actually working on the project. I could go into a lot more detail, but the main point is this -- he's an immature and petty person, and the whole team is so turned off that we screen his calls when we don't feel up to dealing with him. We all have full time jobs, and this is done in our free time. We don't need to add any more stress that is unnecessary.
I had a partner once, and our deal (if someone wants out or wants to buy all) to take 'best offer deal'. Ie I offer him $1k to buy his share, he say no and offer me $2K for my share etc. It will stop at some point. It doesn't apply here if he doesn't want to sell, maybe he want to buy your share?
Hey, First, I'd love to hear about your facebook app. Have you thought about monetizing it? I can help you a bit if you're interested. Second, If you do have a majority vote, force through a clause in the articles of organization that says that you can force a buyback equivalent to the value of shares, as determined by an auditor from Company X. Force the buyback of shares, get the company valued by an auditor, maybe KPMG will be nice and handle a small business account pay him the fair price, and move on. With leaving the company, it depends on whose intellectual property the app is. Look at the facebook lawsuit. Yes, its flimsy, but this was only a small chat in college and now facebook is getting sued. No, the accusers won't win. However, this is a different scenario. Since you've gone as far as incorporating with all of your names, and the IP was his to begin with, you can not use that IP in a new company. Its infringement.
I've read about this "shotgun deal" scenario. I'm not sure how well it'll work when there are more than 2 parties involved though. Thanks for the insight. Regarding the facebook app, I'd like to keep some level of anonymity here lest the subject in question runs across this. If you're curious about it, I can tell you more via PM. As for IP, I think it'll be really hard to prove anything. The original idea was simply getting a group of people to invest in buying product X. Under my suggestion, we started to talk about a website that drew a community (that loves this product) together, so that we could approach them about investing in it later on. The transition to facebook app was something that happened together, although I was the one that drew everyone on the team to start using it in the first place. So the only thing he can claim for IP is the fact that he wanted people to buy X with him. We're not even selling that product on the app right now.
sure, send me a PM in that case, I'd recommend you seek out an accountant's advice, so that it won't come back to haunt you later. Even better, an attorney. Ask them about the clause thing that I mentioned. Good luck
Hi, I have been through something similar and I believe the root of the probelm is becos the business is 'growing' (not neccessary financially yet) which is the good news. I believe you guys have all chipped in ideas, money and effort so far. So as a business grows, perhaps some structure in the company might help as everyone is wearing many hats i.e. shareholders, directors(or management) and "employees" (even if working for no or low pay)at the same time and therefore sometimes emotions can easily get in the way. If you guys still treasure the friendship and wants to work it out, one possible way is to discuss and negotiate and resolve something that works for all, like : 1. Especially who should best play the role in the management of the company(the final decision maker for the business/company when there is conflict) or could it be a board vote for major issues(the 4 of you are all members of the board and the appointed chairman holds 2 votes in case of a tie) 2. Who are the 'employees' and what is their contribution/work scope/deliverables? 3. What will be the fair compensation for their work(which can be either in $ or additional stock options if cash are low). 4. There could be the other issues like what the company wants to achieve or something - so that expectations can be kept clear. This way, no one should say their efforts are unappreciated becos it becomes more like a business transaction. So it helps to keep emotions under control. Anyway, I must say I am not saying this is easy because I just came out of a partnership becos I couldn't resolve the above with the rest. Well I walked... All the best.