My sister set up a business about a year ago. She'd been made redundant almost three years ago, and has two small children. She's divorced. The business uses the skills she developed when working.
In its first incarnation, she invited a retired family member, in an advisory capacity, plus a former colleague to join her. The former colleague insisted that her husband also be made a shareholder "so that she wasn't in the minority", and my sister agreed. He didn't have any skills to bring. They each held 25% of the shares.
Things soon went wrong and after much acrimony, my sister and the family member bought out the former colleague and husband. This summer, my sister asked me to join the business. I'm a chartered accountant, and have many business skills that the operation lacks. I work full time and live 60 miles away from my sister and the other family member.
As background, I've always been very generous towards my sister, both with time and financially. She's just over a year my junior, and has always been in my shadow rather. I've had a much more successful career, for example, but I've never made a big deal out of it. Just recently, my career has stalled a little. So, being involved with a start up might revitalise my CV a bit.
At the first board meeting, the matter of shareholdings came up. I suggested 30/30/40 in favour of my sister. Her previous share, under the old ownership, was 25%. The retired family member said that she "just wanted to help [my sister]" and was willing to go down to 10%. She thought that I should have the same as her.
I said that I'd be willing to compromise at 20%, but since they were asking me to be finance director, build and run a website, twitter feed, web interface etc., and undertake considerable travel on company business, I felt that anything less wouldn't really be worth my while. I thought that it was important for us to be able to communicate calmly and sensibly, like (some) business people, rather than getting involved in the emotional stuff that often comes with family businesses.
My sister is not the most emotionally mature person; I love her, but she can be difficult if she doesn't get what she wants. She sulks and avoids conflict, which makes her passive aggressive; anybody who offends her must be made to pay, you know the sort of thing. She's also quite keen on imputing sinister motives to people. The other family member is from the same mould. I'm not perfect, but I'm not like them. Anyway.....
After the meeting, I spoke to my sister. She said that the business was her idea, that it should be hers and that she didn't think that I or the other family member deserved more than 10%. She said that she might not want me working in the business after all because she was worried that we'd fall out, citing previous sibling quarrels (of which there are few), that she didn't see that I brought much value and that she only asked me to join the business "to give me a bit of interest" (gee, thanks!). She then burst into tears and told me that she'd had a difficult year, so why couldn't I just do what she wanted? It turned into the usual routine: me treading on eggshells to avoid her sulks.
I said that 20% would be fair for somebody you expected to be your finance and IT director, as well as performing other duties in the business. She said, "just put in 10% of the effort then".
I think she's being quite greedy and selfish, frankly. I'd waive dividends, and she's drawing a salary as well as other benefits from the business. There's no way I'd short change her financially. Families are not like Dragons' Den, but I think that in a family business, you have to be businesslike and leave the personal stuff at the door. Also, she was prepared to give her colleague's husband, with no skills, 25% when she set up the business. Why am I only worth 10%?
I'm wondering about walking away, or at least making it clear what I'm prepared to contribute in exchange for 10% (which will be less than I'm doing now; I've been asked to give up 40% of my annual holiday entitlement for business-related activities, plus is it fair to ask me to drive 120 miles round trip for regular board meetings?). Not sure whether I'd be cutting off my nose to spite my face though.
AIBU? Any thoughts? Thanks.