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I met my best friend at around age 10. All during our youth, we'd dream of both being at the top of the world together in business. His sister started a corporation a few years ago in order to help her brother to get out of his depression. My friend told her that if she wanted to start a business, she would have to get me in too.

Reluctantly we tried to work together. I can’t stand her and she has the same feelings towards me. After fighting over founder's ownership over 1 year, I brought in an MBA friend of mine as I realised that none of us really knew what we were doing (none of us have any business experience, just wanna bees). Though the MBA person is the only one that really knows what she’s doing, she accepted an offer to join in at equal share as everybody else in the company. She accepted and it was voted that we’d be all equal from now on.

The next day, the family called me in (We had even agreed that their mom would get 1/6th of the shares even though she wouldn’t actively work in the startup. She holds the status of that of a monarch). Once again for the 4th time that I can remember, they decided that they would go back on their word. Out of 6 partners shares, they want to keep 51% to their 3 family members and allow the 3 others to split 49%. Though it’s not that much difference in percentage, the 3 are worried about having to vent out 17% to the queen, 17% to the bitchy sister who doesn’t know how to prioritize and never wanted to be in business in the first place (she admitted to us that this is not what she wants to do in life… They both live at mom’s, both in their late 30’s! Talk about lack of maturity. In addition to that, he’s bankrupt.. his credit sucks but he has ideas! Lots of them) and 17% to my friend who I feel I don’t even know anymore. When he talks, all I hear is his mom and sister ringing in my ears. One of our biggest client told me our biggest problem is the sister. I know he loves her but…

He tells me he doesn’t want to hear about shares, let’s start working. At the beginning we were to share everything equally and now he changed his mind then he gets upset at me for needing to talk about shares once more while he keeps changing his mind.

Nothing was invested. Nothing was sold yet. I feel I don’t even know my best friend anymore from trying to get him to see my point of view but he won’t. It’s not like him. He will obviously do everything for his family. I’m afraid everytime we have to look at the pros and cons of a motion, he’ll just dumbly side-up with his family without taking the time to think! The way it was proposed to us, we need a 4 against 2 vote in order to get our voices heard. Everytime the family will unanimously vote together, the other 3 will have lost their time to try to make the team see the obvious to no avail!

I thought we were so lucky to have found an MBA who accepted to work for free until the money rolls in. They had to make me look stupid one more time. What are you pros think of all of what I call nonsense? Is this process normal in a startup. Should I simply quit?

Sincerely and many thanks,

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6 Answers

up vote 10 down vote

It sounds really messy and awkward - and pretty unprofessional.

If it was me, (and I am presuming the business hasn't traded and there are no significant assets) I would get out for the following reasons:

  • The business doesn't have much of a future if it doesn't have a solid team.
  • If the business was founded for personal reasons rather than solid business reasons, it will lack purpose and drive and it may never get enough momentum to be profitable.
  • Your relationship with your friend (which you obviously value) is suffering because of the situation
  • Even if you stick in there and suffer the pain, you can't be sure you will be fairly rewarded if the business eventually does turn profit (as promises have been broken already.)

If you and the MBA withdraw, it is my bet that the business would fold sooner rather than later. If that happened and you were interested, you could always offer to buy the IP.

But you are probably better off putting your time into a business where you can spend your energy on the business, not on the interpersonal relationships.

Then you can support your friend as a friend, rather than having so many other strings attached.

Good luck

(Disclaimer: This is an opinion, not professional advice and obviously you need to do your own research before you make a decision.) :)

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up vote 8 down vote

Walk away. Actually, no, run away. Sounds like a huge mess, and the best thing you can do for your sanity as well as the possibility of salvaging your friendship is to get out.

You are clearly resentful of the situation, and while there's might be another side to this story, it doesn't matter. Things have moved to the point of no return, and you should get out of this situation. I suspect that if you quit today, you'll have a huge sense of relief within a week.

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up vote 2 down vote

Mark - I wholeheartedly agree with what Dror and Susan have written. For future reference, I thought it would be helpful to answer the question you posed "Is this process normal in a startup?", in terms of what I think is normal:

  • Giving 110% commitment and focus to getting your business idea from concept to production, usually at significant personal cost

  • Constantly worrying about whether you're going to run out of money before you get to the revenue generation stage

  • Worrying about whether some competitor is going to spring up out of nowhere and get to market with a better implementation of your idea before you do

  • Being prepared to do everything in the business - build the product, craft the website, work out the marketing, take out the trash, etc - no matter how unqualified you feel you are

  • Accepting that life in the startup game is often tough and lonely, requiring you to dig deep into your personal reserves of commitment, resilience, focus and drive

My point is that starting a business is tough enough without having the things you describe to contend with. At the end of the day it's your call, but like other writers have suggested, you are likely to find yourself in a much happier place and with far greater chance of success without all this "nonsense".

HTH.

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up vote 0 down vote

why is yours same as mine.... in my case I did all the work and got the revenue, funded my friend's family biz and was told I don't own any shares. Sad part is I don't care for the shares.... saddened me was I lost a friend!

Stop and RUN! get out now and save the friendship.

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up vote 0 down vote

And another point is

His sister started a corporation a few years ago in order to help her brother to get out of his depression.

It seems your aim with the business is different from theirs and that seems to be reason enough to walk away.

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up vote -1 down vote

Get out and start another business with the people that you work well with.

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