To stick to terms of agreement with friends

[Bungybungy]

Burner account. I’ve been friends with F for decades. She had a large social media presence. I’ve worked hard to establish my business and have been successful. I’m proud of what I’ve achieved. 5 years ago, F came to me with a business idea, wanting to set up herself. She didn’t at that time have the funds to set up by herself so I agreed to invest a not insignificant sum in return for 20% of the business. She was happy with that deal, and because I work in legal services, I got our guy who deals with contracts to draw up an agreement specifying what rights and responsibilities etc. Although this was an area she had worked in before, she had never actually run a business before. I guess that’s why she came to me in part, so it wasn’t just about the money. To her credit, and using my advice, the business has grown quickly and is well known. At the time of the investment I understood that I could just as easily have lost my money completely.

Our relationship is now very difficult as I’ve realised over the last 2 years that she’s been distancing herself from me, which is fine, relationships come and go, but last week I got a letter from her solicitor telling me that she was unhappy with my ownership and that she wanted to buy me out for just over my initial investment. Given the business is now worth several times over my initial investment, I can’t accept that (she put close to no money in herself). For her to pay me off would cost her 5 times my initial investment. AIBU to expect her to honour the agreement? I know she’s contractually bound but she’s been so vile about this, I’m second guessing myself. She keeps threatening to “out” my business via her social media(I have no idea what this means). I’m actually scared about what she could do.

@Bungybungy in your first post you had said she was going to out you on social media and said you are worried.
Why are you worried

I would get out of the business but she has to give you fair price.

That isn't how selling a business works though, so in the event that the OP's former friend decides to disappear, the OP could sell the business and making it continue to generate revenue is the new owner's problem to solve.

When selling a business, the prices is based on multiples of revenue. Higher profit means a higher multiple, so as long as the time to sale hasn't been long, and the business is profitable, it could be a very viable going concern.

Whilst I don't doubt the OP's former friend put in some graft, it is unlikely she has any unique skill that another buyer may have.

Thanks to all for the advice. I think that now it’s in the hands of lawyers I won’t comment further save to say I’m not going to roll over and give her exactly what she wants. There are some restrictions that I won’t go into detail about and the business is not at all tied to her “identity” so we could, if needs be, get someone else into run it. This is not the first time I’ve invested in family or friends. Maybe I’ve been lucky but in the past I’ve always experienced a mutually respectful business relationship separate from our other relationships. In fact, most have gone on to buy me out on favourable terms to the other party(parties) with my blessing and backing going forward. This is entirely different. I’ve been met with outright accusations that I’ve abused our friendship. Never again. I just need a good old mumsnet kick up the arse to help me refocus and not feel like the mega bitch she’s painting me as, which you’ve given me. Thank you 😙

So... YOU took advantage of HER by investing in her start up business, which had a risk of failing. Had it failed, you would have lost the "not insignificant amount" and she would have lost zero.
She can't be that dumb, surely?!

Her large social media following is not necessarily the advantage she thinks it is. IF they find out she is basically trying to scam you, they will dissappear rapidly!

If you think she may defame you on social media you may also want your solicitor to be on alert for this and potentially make it a term of the buy out [that she won't comment on you on social media or press]?

People never cease to amaze me. Good luck OP, but it doesn't sound like you need it. You have definitely not abused the friendship, more like the other way around.

If she's contractually bound, deal directly with her solicitor only. Keep it out of the friendship. You might lose the friendship but if she's being that vile it doesn't sound like a friendship worth saving.

I imagine her that to "out" your business is an empty threat, particularly if you don't know what she could have on you. She will know that that could open the door to a public attack on her own business practices if you were so inclined (I'm sure you're not!) as you actually do have something on her, and her unwillingness to honour the terms of contracts she enters into.

I think she's just got greedy, she's seen that her business is flourishing, she's seen the £££ signs and thought now would be a good time to give you back the initial investment and pocket the rest. I mean, you are 'friends' after all and there's no way you'd stick to the terms of the contract she signed, right?

She knows exactly what she's doing!
Sneaky and conniving madam. Why would she try and screw over someone who gave her the money to start up. Without your investment, would she even have a business? I doubt it.

Please keep us updated OP. We are all v invested!

Cheering you on OP. It also occurred to me that you have in effect invested more than once in her by not taking dividends but allowing them to be plowed back into the business over the years. I would absolutely make it a condition that she does not defame you and have this as part of the dissolving on the contract - with penalties if she does. And get ahead with it on SM. I might be tempted to say that you have always dealt with these situations in the past by mutually agreed terms, but given her unreasonable behaviour, you have had no choice but hand it over to your legal team.

Just follow the law and point out to her that you are doing so and if she were to do otherwise then it would reflect very badly on her business, not yours, and ‘outing you’ on social media could really backfire for her.

If the business HAD failed and your investment become worthless, would she have made sure that she paid you your money back 'because you're friends'?

How could she possibly believe that people invest in businesses in the hope of, at best, only getting their original money back, but also with the real possibility of losing the lot? Why would anybody ever do that?

And she's conveniently ignoring the fact that her 80% has also grown by the same magnitude as your 20% - all the time painting herself as the impoverished, taken-advantage-of little church mouse.

You are an investor let her out herself if need be

Stick to your guns don’t let her getaway. Out of curiosity how much did you invest? You should have also asked for more shares then

I think you have hit the proverbial nail on the head OP as the apparent 'entitlement' seems to be the overriding factor for her childish and naive, not at all pleasant behaviour?! 🙄She sounds like the epitome of every self centred, narcissistic, mouthpiece seen on so many Youtube channels! 😱
How she could ever imagine that as everything was legally set up at the onset she can now just casually dictate on her terms what happens now and expect that you will concur without a squeak is just unbelievable...the cheek apart from anything else!! 😳
As others have said put it all in the hands of a solicitor, do NOT interact with her at all, let her stamp her feet and make silly threats that she probably knows won't hold water anyway in reality although you haven't made clear what she is threatening to make public? 🤔
You must take the moral high ground which by the sound of it you're standing on anyway?! 😡

Get your own lawyer to tell hers that you own 20% of whatever the company is valued at NOW, but will settle for 18%. Her own lawyer might advise the wisdom of accepting that deal. If she follows through on her threats, sue her. You have the legally binding contract.

Maybe read at least the OP’s messages on a 9 page thread before posting… she did this 5 pages ago 🙄

Then that’s how much you should get back. As people have said. Everything through a solicitor. Look for one who has mediation disputes experience etc. If you have legal insurance this can be used.

hand it over so it’s not personal. And she’s not your friend. She may be mean about you but she will do that whether you stand up for yourself or not. So you may as well stand up for yourself and get what’s right.

best wishes to you. It’s going to be a pita but remove the emotion and be happy you took a risk that’s paid off well done you !! 🤗 good luck with the negotiations

As people have said. Everything through a solicitor. Look for one who has mediation disputes experience etc. If you have legal insurance this can be used

Shes already send a solicitor letter.

I might consider asking her for 2 times your original investment on your stating your investment is now worth 5 X that.

This is exactly what I was going to say.

Do you have evidence of her threats? Did she put this in a text or was it verbal?

Another reason to only deal with her through solicitors.

It is possible the solicitor she has now engaged is completely unaware of these threats. If you issue a cease and desist, her own solicitor will be telling her to stop with the threats!!

It was a secured business investment. It was not a personal loan. She knew that at the time. She should honour your agreement or risk being outed as someone not trustworthy enough for anyone to invest in.

You might lose the friendship but if she's being that vile it doesn't sound like a friendship worth saving.

The friendship is over.

Did you not read her update to say she would not be updating 😂

Huh, I'm often the one to think that of someone else's post, but I'm not rude or obnoxious enough to say it because unlike righteously perfect you, I realize people error even when their intentions are good. Is it a recognition thing with you that you feel the need to point out the flaws of others? Does it make you feel a power you crave? Maybe therapy would help.