Equity Redistribution and Fractional Partner Buyout

A trading company was founded by three founders. Over 10 years, the company grew significantly from scratch and became a market leader in its segment. The degree of interest and involvement, as well as the spheres of responsibility of the partners, changed and were reassessed several times over the lifespan of the business. The relationships between the partners were respectful and businesslike, but personal friendships did not endure through this period. The personal interests and plans of the partners regarding the future of the business and their participation in it began to diverge significantly.

One of the partners, burdened by maintaining the status quo, sought consultation from Business Relationships Lab. The task was to develop a solution for revising the partnership structure and shares in the business, which would satisfy all partners and establish a clear action plan.

Business Relationships Lab consulted the initiating partner on aspects of:

• documenting the exact picture of current relationships, the business setup, and likely expectations of the other partners,
• the strategy for negotiations on the buyout of the share (the feasibility of a buyout, the price, the sequence of actions),
• various pitfalls in the process of excluding the old partner and incorporating new ones into the structure.

As a result, a scheme was developed whereby two partners were to buy out the share of the third and take over the business management themselves. Part of the share would be transferred to the ownership of top managers, who would take on some key functions for development. The shareholders left the implementation of the scheme to themselves.

In January 2024, the partners conducted negotiations, agreed on the amount and parameters of the buyout, and carried out the transaction. All participants in the transaction are satisfied with the results, and the business continues to develop with a new composition of founders.