Lovefraud.com recently heard from a woman in Illinois, who we’ll call Mary. Mary is trying to protect herself and her eight-year-old daughter from her ex-boyfriend, the daughter’s father, who has guns and has threatened to use them. Not only is Mary fighting the ex, but she’s fighting lawyers—both hers and his—and an unresponsive family court.
Mary left the ex for good in 2001, when their daughter was three. The guy has an alcohol problem and a 20-year arrest record. He has five arrests for DUI (driving under the influence of alcohol) and 14 DWLR arrests (driving while license revoked). He has two arrests for domestic battery. Two different women have sought protection orders against him, including Mary.
In July, 2004, after three years of seeing his daughter sporadically at best, the ex decides he wants to be an involved parent. Coming from a wealthy family, he can afford to initiate a lawsuit and hauls Mary into court to get visitation rights. Mary works full time, but as a single mom, struggles to support her child. She can’t afford the best lawyers money can buy, and she doesn’t qualify for public assistance.
Arrest and conviction
Now, prior to filing his petition for parental rights, the ex was arrested for DUI and DWLR in February, 2004. He gets arrested two more times, in July and November, 2004, for DWLR. So on November 15, 2004, family court awards him supervised visitation rights. Eight days later the ex beats up his current girlfriend. She gets a protection order against him. Then in December he goes to jail for the DUI conviction. He serves 90 days of an 18-month sentence and is released on parole.
All of this happens while he is petitioning the court for his parental rights. The court appoints a clinical psychologist to evaluate both parents and the child. After 20 hours of interviews and evaluation over four months, the psychologist reports that the ex has a history of alcohol abuse and is vulnerable to relapses. He recommends that visitation continue to be supervised, and that the father complete an intensive substance abuse treatment program before overnight visitation is allowed.
Mary’s days in court
On November 15, 2005, Mary is back in court with the ex. Her legal counsel is less than stellar. Mary’s lawyer refuses to subpoena the woman who filed a protection order against the father. Mary talks the woman into showing up in court anyway, but Mary’s lawyer never calls her as a witness. And, Mary’s lawyer never asks the psychologist any questions related to the ex’s violence.
After a six-day trial, the judge rules. In giving his decisions, the judge notes that the ex’s alcohol dependency has not been resolved, and that the man’s mother and stepfather both believe he still has an alcohol problem. The judge notes that the ex has a tendency to disobey court orders. Yet he says the psychologist’s recommendation of no unsupervised visits until after the father completes a chemical dependency treatment program is an unwarranted restriction of his right to visitation. The judge rules that there is no risk to the child, apart from the alcohol issue, and awards the ex unsupervised visitation. He orders the father not to drink alcohol during visitation or for 24 hours before visitation.
Threats of violence
Two days later, the ex calls Mary and tells her he still has his handgun and that he would be a better parent if Mary were no longer around. Mary interprets this as a threat on her life, and asks her lawyer to get an order of protection against the ex. Her lawyer refuses.
The ex continues his threatening and abusive behavior. By February 8, 2006, Mary has had enough. With the help of a family advocate, she gets a protection order on her own. A different judge hears her case.
In the meantime, the ex’s lawyers file a petition to reconsider the parental rights decisions. They want the ex to have unsupervised overnight visitation immediately upon completing a substance abuse program, without an additional court hearing. And, they want his support payments to be reduced, arguing that he really doesn’t get any income from his two trust funds.
On February 16, five days after being served with the order of protection, the ex follows Mary as she drives home from work. Mary photographs him in his car with her cell phone camera and calls the police. The ex is arrested again for DWLR and charged with a criminal felony.
Mary is nervous about testifying against her ex in the felony case. Here’s what the police officer says to Mary: “I have his record in front of me and I can tell you from experience that he is capable of killing you whether you are a witness to this case or not. You need to make a choice to stand up for yourself or let him keep coming after you.”
Back in court
The ex’s lawyers ask the court to combine the protection order hearing with the parental rights case. So on March 1, Mary is back before the family court judge about the protection order. She no longer has a lawyer, so she tries to represent herself. Her ex has two legal teams, who claim that the man has never harassed her. The judge refuses to admit any of Mary’s evidence and vacates the emergency order of protection. The judge further orders that Mary and her ex communicate in a non-abusive and non-harassing manner, and that the father is entitled to telephone visitation daily with his daughter from 7 to 7:30 p.m.
Mary begs the judge to allow her to communicate with her ex only by e-mail. The judge refuses, stating that all communication must be by telephone.
Last week the ex harasses Mary over the phone again. She gets another order of protection.
The next day Mary is back in court in response to her ex’s motion to reconsider the rulings on his parental rights. Although she contacted 43 attorneys, none will take her case, so she is there alone. The judge postpones the hearing, but tells her that if she doesn’t have an attorney on the next trial date, Mary will have to represent herself.
On March 23, 2006, the ex’s home is searched by his parole officer and a representative of the sheriff’s department. They find guns and drugs. He is thrown in jail again.
Can you help?
“It took a long time for me to really understand that he is as dangerous as he is,” Mary says. “I have always been someone who believed all people had some good. I don’t believe that anymore. No matter what I do (try to help him or speak out against him—I have done both), his only goal was to manipulate me and keep me from achieving success of any kind in any aspect of my life. If he does kill me I am not taking his secrets with me.”
Now that’s courage.
Mary still needs to respond to her ex’s demands for visitation rights. Her goal is to keep her daughter safe. If you know an Illinois attorney who can win her case, please contact Lovefraud.
Yes, recovering.
I know that game, too.
Be careful, recovering.
Thank you Rosa. I sense your concern, and appreciate it!
recovering and Rosa,
Just my two cents….I think the one thing that can happen is that “once removed” from the DAILY crazy making and the daily con jobs a cluster B can spin into our lives, it is sometimes difficult to remember CLEARLY how they really do operate. And have the capacity to turn our lives upside down and inside out.
In other words we do know it was BAD, but as we start to get a grip on our own reality once more, it can be “fuzzy” to try and recall how it was that they DID manage to zap the life out of us and distort everything, including our own reality at times. And how exhausting it was.
Kind of like childbirth. You remember the pain as being the worst pain you ever experienced (for most of us) but that recollection gets “fuzzy” as far as the details of it all as time goes on. If it didn’t get “fuzzy” most of us would never have more than one child. You tend to remember that pain VERY clearly again when the labor starts, with your second or third (or whatever) birth.
I am not sure that any encounter in business or otherwise can be mutual benefiting that involves a cluster b.
I certainly haven’t heard of any stories of this nature.
I am not good at explaining myself sometimes. But you are a very smart and articulate woman recovering. I always admire the wisdom in your post.
Be careful with this decision. It seems to me the smartest sociopaths always have an “angle” or leverage. For many women it is their children they share with the S. With yours it could very well be this money you owe him.
witsend: you provide wise words about the necessity of remembering, “once removed” from the DAILY crazy making a cluster B can spin into our lives. And there is danger in forgetting how they really do operate, and have the capacity to turn our lives upside down and inside out…And I do remember how exhausting it was.
I wonder if there’s a part of me that hopes he gives me more money and moves back to his country before I get a chance to pay his money back, so I can feel like he paid me a full year’s salary for all the trouble. LOL.
No, but seriously, I am engaging with diverse people, not isolated like I became somewhat during the relationship except for attending business functions with the ex. So I get lots of “sane” fun and reinforcements from spending time with people who don’t do all the non-sense. It’s refreshing and helps keep me aware that I no longer have interest in a personal relationship with the ex.
As far as I know, he might be into new narcissistic supply by now. We only talk business, when we talk occasionally.
recovering, my offer to talk was based on my experience in staring up several businesses, and owning this one for for a little more than a decade. I have a variety of experiences with investors and lenders, both positive and negative. I know something about the legal and accounting issues involved. And I thought it might be helpful for you to discuss both your options and some of the potential outcomes.
It’s not clear whether you ex’s loans were personal or to the business. And that makes a difference. What is clear is that the company needs outside cash, and it sounds like the need is because it’s growing fast enough that cashflow can’t support the need to invest in the business to support the growth. I hope that’s the case.
You sound like you believe that you can handle him, in terms of keeping the loan separate from ownership and control. Although you do talk about “investing” in the business, which suggests that at minimum you’re putting equity up as collateral, if not actually giving him ownership in return for the cash. This is where I get concerned.
Your description of him sounds like someone who is, comparatively emotionally immature, and who was not concerned about looking at his assumptions (perhaps cultural) about the terms of your relationship. You didn’t like the role that forced you into, and the personal relationship ended. But it sounds like neither of you are carrying around lingering resentments, or at least both of you can separate the personal issues from the business ones in your current discussions.
I guess that the question this leaves open is this. What role or involvement or benefit does he foresee as a result of his “investments” and how much of a hassle will that be for you in the future? Or maybe, how do you foresee the interplay between him and you in the future as his equity involvement grows or the business grows?
Even in very small businesses, an equity stake gives the stakeholder the reasonable right to demand full access to the books, as well as the right to communicate his opinions and concerns about how business is conducted to protect his investment. If you have a majority stake, you clearly have the power to override anyone else’s opinion. But you can’t make that person go away, and you are vulnerable to legal action, even in a small business, if the stakeholder feels that you are not acting in a way that is conducive to protection of his investment or reasonable returns for that investment.
Most businesses do start up with “family and friends” money. And most entrepreneurs are psychologically not particularly open to input, beyond advice they seek out. But the reality of taking money in exchange for equity is that you are going into business with someone else, no matter how you want to characterize the relationship. And that creates obligations and unavoidable involvement between the business and the equity holder. If you extend equity ownership to anyone else, your role is permanently altered, because now you are not just the majority stakeholder, but also the manager of his investment, and as such answerable to him.
This is why most people, especially after they’ve been through a few rounds of creating start-ups, become very conscious the money they accept. There is “good” money and “bad” money. Good money ideally comes from people with business expertise and possibly connections with potential customers. They recognize that, in investing, they are also responsible for supporting you and the health of the business. Bad money comes from people who are looking for too-fast, too-high returns, or have some other ulterior motive for investing that has nothing to do with the long-term growth and health of the business.
There are ways to extricate yourself from bad-money situations. I’ve been forced once to deliberately destroy a corporation in order to force an equity holder to agree to a buyout. It seemed like a terrible, emotional mess at the time, but in retrospect, it was fairly simple. My intentions were not to screw the stakeholder, but just to do the payout and get free to run the same business as the sole owner. It eventually worked out with a fair settlement, although the other person was not happy.
So, except for some factual details that we could share, I think I’ve said what I would have said to you, if we’d talked. If you do have a sense that this business can and will become something substantial, think about who you want to do business with over the long-haul. And that includes who you respect, who adds value, and who you trust to be in alignment with your own vision and objectives.
Good luck with it —
Kathy
Hi Kathy — Thanks for such a thoughtful overview. Your holistic approach to this thing, with many aspects to consider, certainly offers much to take into account.
In terms of the creation of “obligations and unavoidable involvement between the business and the equity holder,”
and being answerable to others, I definitely know accepting money from others will require compromise to some extent — regardless of who they are.
That’s why I’m casting a wide net to invite different potential investors, before consulting with my business attorney on final decisions.
A journey of discovery and more life learning it will definitely be, I’m sure.
Kathy — One more thing. Thank you for your succinct description of my ex, about whom you wrote,”sounds like someone who is, comparatively emotionally immature, and who was not concerned about looking at his assumptions (perhaps cultural) about the terms of your relationship. You didn’t like the role that forced you into, and the personal relationship ended. But it sounds like neither of you are carrying around lingering resentments…”
That really sums it up very well. Yet, I get the impression others think I should be living in fear or trepidation about any communication with the ex…but this approach doesn’t fit for me.
Sometimes, I feel like my experience wasn’t worth complaining about because my encounter with the ex N/S was in hindsight not overly extreme — yet it was damaging…this emotional immaturity, with the emotional abuse/gaminess…to make me take notice and realize I needed to get a grip, and somehow get out/detach personally.
Perhaps I was able to heal sooner rather than later in part because I had reasonable boundaries when I entered the relationship, and once I got more information about “backwards approaches”(a concept from Patricia Evans’ book, “Controlling People”), found Lovefraud and other websites, it helped me to put more pieces together, not take his issues personally and set consistent boundaries over time.
And — although there was no full closure for some things, since he sometimes mixed lies and truths knowingly or unconsciously — he did get honest enough with me after a while about his cultural upbringing, which made a light bulb go off further about the NPD stuff. That may have enhanced my healing in some ways.
With the intermix with my own family-of-origin stuff, there was no way I could fully blame him for everything — after the dust had settled — related to my emotional meltdowns. I’d started a new business when I met him and had insecurities around that as well as old personal relationsip stuff. And he was a good trigger who mirrored me in ways no one had ever done.
Sure, I got angry at the time and do wish he’d told me many things sooner rather than later, but I could not fully blame him anymore than I could blame myself for the lack of awareness that led to more consciousness as a result of being in the 1.5 year relationship.
So, I really am not angry with him anymore. He’s just not the right man for me, regardless of the reason/s. I have no need to trash him even though I know he is a NPD (with traits on the S continuum).
Whether the NPD is more cultural for him due to survival orientation or not (when he was in his previous country) is his job to figure out — if he wants to. Who was I to say he should have gone deeper into his cultural/personal issues to become healthier mentally — maybe he couldn’t handle what it would require, after having lived a certain way for so long. I don’t know.
My responsibility was was to identify that I couldn’t handle a relationship with him as he was with all the intense neediness and related chaos.
It’s as Steve Becker once wrote in a post about “nurture vs. nature” in terms of the origin of someone’s disorder — after a while it can merge to where there is little distinction between what is nature vs. nurture.
So what matters most is not the “why” but the whole set of behaviors and how being in a relationship with someone with major issues affects me/us.
recovering, I’m going to take this a wee bit further, and risk aggravating you. I probably wouldn’t even try, except that you’re in a healing and reconsideration process in the rest of your life. So maybe you can see something here that is related.
My “holistic” overview comes not just from my experiences with my own companies, but from counseling dozens of entrepreneurs. This is what I do for a living. There are certain consistent patterns of psychology and behavior. The same characteristics that impel an entrepreneur to do the hard work of creating a vision and then building a business that reflects his or her idea of personal independence or a “better way of doing things,” can also sabotage or limit the business growth, and unless the entrepreneur learns something from it, will probably be reproduced in the next thing they try.
One of the books I’ve thought about writing, but probably will never get around to is on “founder-itis” and the stages of growth and decision maturation that every entrepreneur has to go through.
So let’s get this back to you. I’m going to cite a few quotes from your previous posts on this topic.
Probably the one that struck me the most was this one: “having a small business with majority ownership is important to me I know I can’t do corporate America anymore. Too taxing.”
I’m not sure how long you’ve been running this business, but if it’s less taxing than working for someone else, I’m not certain what you’re talking about. However, I suspect that by “less taxing” you mean you got tired of dealing with bureaucratic BS and decided that you could control your own career and see direct returns from your work and not be subject to other people’s ideas of how things ought to be run or how you ought to behave.
If that’s what you mean, then you’d be a pretty typical entrepreneur. They have problems with authority (usually because of background issues) and they want to be their own authority. And any interference with that is something they don’t handle well.
(In fact, one of the reasons I have the “voice of authority” that I do now, is because I’ve had to face down so many entrepreneurs who wanted to tell me how to do the job they hired me for my expertise to do.)
So I understand your idea that you’ll have to make compromises to get the money you need. However, as I tried to explain in the previous note, seeking funding is an opportunity to recruit a valuable team. Not a management team (although you’ll have to get to that and delegating authority eventually if you want to grow), but an advisory team that can significantly enlarge your knowledge, understanding of potential next moves, and provide references or guidance in terms of finding and serving new customers.
If you look at the cost of money as all bad, you’re missing this point. And if you don’t think about it, you won’t look for money in the right places. Money that comes with these benefits. And you won’t make the right pitch for the money, which is that you want these people’s involvement in your business — expertise and guidance as well as their money — because you believe this business has real potential and you want the right kind of backing. And then, when you do your stand-up presentation with the PowerPoint, you will be directly addressing the biggest problem (other than revenue weakness) than any early-stage entrepreneur faces. And that is your own credibility in terms of management capability. If you are frank that you’re looking for the best advisors you can find, along with the money, it will make you look smarter than if you BS them about having everything under control.
You wrote: “Many factors required to maintain/grow a small business in this currect economic situation. Sometimes it means biting the bullet for a temporary period and pulling resources together however one needs to that’s just the way it is.”
I disagree. You’re not including one very important option in this statement. That is the possibility of walking away from the whole thing. I realize that is the last thing you want, but the statement about getting money “however one needs to — that’s just the way it is” suggests that your idea of the most important thing in your life might bear scrutiny. If you’ve got your identity pinned on this business, you’re going to have a rough time when it fails, which it is statistically likely to do.
Yes, if you want to succeed, you’ve got to throw your whole self into it. But you’re “whole self” means something. You don’t give up your integrity. You build and run this as a reflection of who you are and what you believe in. And if your beliefs include humane treatment, that extends to you. You don’t invite chaos into your life, because you think you’re going to die if this thing fails. And you regard its existence not just an opportunity to get direct rewards for your work, including the credit for being smart and successful, but also as an opportunity for experiences you want, including sharing a building experience with some really cool people.
Which brings me to this: “My ex only has power over me if I allow him to, now that I know enough at this point and respect my own limits and boundaries.” And this: “he talked more “con” than he actually carried out during the time I was with him. He gives himself away his lack of patience with outcomes accounts for this in part, I believe.” And this: “I wonder if there’s a part of me that hopes he gives me more money and moves back to his country before I get a chance to pay his money back, so I can feel like he paid me a full year’s salary for all the trouble.”
And I want to go back to issues with authority. People with really good boundaries don’t have these issues, because they trust their boundaries. And the first statement in that sequence may sound like that, sort of, but I don’t really think you’re out of the defensive mode. Or the resentment mode. Or having a significant (and rightful) amount of concern about what this man’s potential influence on you (not to mention your business) might be.
What he doesn’t sound like is the guy with so much business intelligence that every time he says something, it either opens your eyes to something you never thought of, or is actually so beyond-you smart that it takes you a few days get a grip on why he said it, and then you’ve moved up to a whole new level of smart.
What he does sound like is walking chaos — immature, selfish, out of touch with reality, and, worst of all, someone who needs other people to be impressed with him. Of course, you two are getting along fine right now. He’s the important guy with the money. He may even give you money to prove what a great guy he is and bask in your gratitude. But after your history with him, I doubt you really expect this to go on, once you’ve got the money and have no need to pay him so much attention, and he starts upping the ante to keep that attention coming, because he’s “earned” it.
You wrote, “As far as I know, he might be into new narcissistic supply by now.” As though that might protect you. Do you think that any of his relationships are about anything but narcissistic supply? Do you imagine that if he gets enough from one person, he can just be a regular guy with everyone else? Maybe. You’ve had the eye-opening experience of being his main source, the one who gets to deal with his sense of entitlement. But what do you think the difference would be if he got his hooks into you through your business?
And then think about this. Entrepreneurs are narcissistic. They have to be. Their business reflects them, and they are out there everyday making that business match their personal vision — whether it’s dealing with customers, managing staff, the bills, the facilities, the marketing. It’s all about them, and like real narcissists, they have big control issues. (Which as I’ve been trying to explain to you, can start hurting you at the beginning if you don’t understand that you want and need the best partners, and that hurt gets worse as time goes on, until you realize that you are bringing up a thing that isn’t you, but an entity with its own life and systems logic.)
So what happens to you when you have to start kow-towing to someone whose narcissism isn’t creating anything, just eating time and energy pointlessly. What does this do to your productivity and ability to focus (the most important positive trait of corporate leaders) and ability to imagine the future? You know this guy and you already know the answer. There is no question that you’re going to be dealing with lots of narcissistic folks in the business world, and you’ll have to learn how to make them feel good while getting what you want, but in no other part of your world would you bother, if there wasn’t a really good reason for doing it, something really important to get out of it.
So you may think the money is that important. And if you were just dealing with some kind of daddy, who would give you the money and say “have a nice time, dear,” and you could forget about it, that might be so. But you give him equity, and you’ll be paying for that money until you figure out how to get rid of him. And all these extra payments will be nothing but hemorrhaging energy. Nothing in return, like you could get from that really smart investor who could help you in daily ways with all the tough problems you’re going to face.
A really long time ago, back when I was a partner in a New Age bookstory in the ’80s, I read that owning your own business is one of the fastest paths to higher consciousness. At the time, I was pretty smug that I knew what that was about. Later, even before that year was out, I learned that I really didn’t. A business will rub your face in whatever is dysfunctional about you, and you will either lose everything or change, and sometimes both.
But it’s all good, because trying to do something big, taking on the responsibility of building something, pursuing a vision, getting your ego involved, all adds up to a chance to really stretch yourself. One way or another, you grow in ways that you never imagined.
So, I know you’re going to do what you’re going to do. I also hear you putting together a rationale for re-involving yourself with this guy in a way you can’t walk away from. And the one thing I want to say in parting is that the quality of your vision is the greatest determining factor in your results. I’m not arguing with your claim that you can defend yourself from him. I’m arguing about whether that’s the best thing you can imagine for yourself right now.
Apologies for all the unrequested advice. I know I’m meddling. If it’s any comfort to you, I usually get a lot of money for this.
Kathy
Wow Kathy! “When the pupil is ready, the teacher arrives”. I just returned from a talk with my colleague with whom I want to set up a partnership. We were determined to split the costs of building new offices (he already has an outpatient clinic for 16 years now and asked me to come because he is too busy). His business advisor told him to do it on his own and hire me for two years and grow it organically, with a low fix salary but improving when things get better. He has also to hire new staff, and after all I sit into a “made nest”, and the cost of THAT i.e. his good name and his investments in the previous years we still have to figure out. So it takes lot of tension of both of us as we can see how things are going.
I read from your advice to recovering the exact argumentation about the money that it gives obligations and “faits acomplis” you can’t solve later, and money is a VERY STRONG BONDING TOOL. Although my colleague and I were both determined to do it “50:50”, and we both want fairness to prevail, and I am very sure about that. Even the bank manager I consulted afterwards said that it is wise to proceed like this (I made an appointment to get a huge sum to start the business; we had a nice and very informative talk about start ups, loans, risks and checks and balances and the like; I am completely clueless in this field, whereas my colleague has been seasoned with time and he has learned all the tricks with time and knows all the pitfalls).
Yesterday evening I met the staff of the office, and it was very pleasant, we had a great evening, and today I saw a very nice flat I will try to rent if possible.
But proceeding with caution is not a bad thing, especially if you KNOW that the other is a N/S/P. They NEVER EVER LEARN!!!! My father (P) now lives in our holiday home and made comments about my mother’s mental state that she was “peculiar” lately and she was not wanting to see him around any more. (They are both 80 years old, both sick father cancer, mother broken foot). I asked my mother about it all and she said he can come back any moment he gives up his girlfriend he still has around. This said girlfriend is 30 years younger, was a former client of my sister and is the GF of father for some years now. She is after money my father does not have any more but said GF does not know that. Father refered to her as “my stinky cheesebread”. VERY DISGUSTING!!
I asked him today whether this was true with the GF as mother stated, and he asked back “Which one?”. Wrong answer, father!!!!! I stopped the conversation immediately. I had started to feel pity for him for having radiotherapy for prostate cancer, being on hormonal therapy that shuts down testosterone, and I felt awkward towards mother who was not nice to poor him. But in the same time he tried to manipulate me into questioning my mother’s mental capacities. And without any doubt he still has this OW around! Not my problem!
My advice to recoverning would be to avoid at all cost THIS money you already know the psyche of the owner of. There might be others with their money who are alike, so stick to knowledge and guts (I assume you were not sure, otherwise you would not have brought up the issue but went head over heel as I was intended and determined to do!) Good luck, and thanks to you for bringing up this timely topic!
And Kathy, thanks a lot once more for clarifying the facts . As my colleague brought up the issue of proceeding with caution and him getting all the money on his own I initially had a slight insecurity for a split second, “He is not sure to commit fully, hire means fire afterwards”, but he addressed my concerns in this resepect as well and afterwards I felt much better. It is not so much of a HUGE commitment at first on both sides. Relaxing! And we have plenty of time to figure out how to proceed in the future; I will start in May this year, and that is pretty soon!
Have you all avery pleasant sunday!
libelle, I’m not certain how this is a 50/50 arrangement if he owns the business and you are an employee. That may give you security (which you don’t get as a business owner) and possibly some precedence as senior employee. But unless equity is in the deal, it’s not really a partnership.
This actually may be best for you, if you’re still recovering from a very bad relationship or a very bad history. Partnership really is a kind of marriage with children, with all the potential for disagreement that entails. If he owns the company, and you are an employee, that at least sets up an order of authority and the two of you don’t have to be jockeying for position everytime you disagree on something.
The other thing for you to consider is financial risk. One of the reason the owners are the owners is because they risk their own money. (Or as you were trying to do with the bank loan, money that you’re responsible for paying back.) People who are employees may have a job at risk, but the owners have that and the money they invested. They set up the whole thing and they have more to lose. But also more to gain, because the company is designed to provide them with profits (as well as salaries, though often owners defer their own salaries and live on their savings while the company is getting off the ground).
Make sense so far? So for you to be an owner, you have to invest something. It might be money. It might be sweat equity. Unless you’re so famous that your name is an asset that will bring in clients, or you have some really obscure and vitally important skill that warrants an unusually beneficial deal, the general rule of thumb is that something that you can be hired and paid to do (and you are hired and paid), doesn’t count as reason for equity ownership.
That doesn’t mean you can’t get equity, it’s just not how you get it.
I’m bringing all this up, because I personally think it would be better if you started with a bit of equity. It doesn’t have to be half. But if you’re starting this business together, and you’re approaching it with the kind of commitment that an owner would bring (long hours, a lot of planning and discussing, and being will to “be there” in ways that a nine-to-five person wouldn’t be), then you should have a stake in the company’s overall success. That means, the profits and a piece of the action if the company is bought out. He obviously wants you to help him start it for some reason, and I’m assuming he’s regarding you as a partner in putting it together.
So I think it would be reasonable for you to say to him that you would be more comfortable with being involved in all the intense focus and responsibility of getting this off the ground if you had some equity stake.
What you do not want is to find yourself in the position of “corporate wife.” That means, you’re someone who is totally involved with everything, like a wife would be in helping her husband get off the ground, including helping him think through things and taking on all the important “little” tasks he needs to keep his mind wrapped around the “big stuff.” And then to find yourself regarded as a smart and generous person, but not important enough to be considered a partner or even management.
I’ve been there. It’s a very seductive role for people who thrive on feeling needed and who are tempted to think that the thrill of accomplishment is enough. It’s not. Business is about money first, then visibility (social power) and control (operational power). If you think it’s anything else, you’re setting yourself up for a lot of resentment when you realized that you’re not getting what you didn’t ask for (but just “thought he’d do the right thing”).
After being involved in a lot of business situations in which I was either the owner, a partner, a client, or a vendor, one of the most important lessons I learned was “start as you mean to go on.” People imply a lot of things when they’re trying to close a deal. Once the contract is signed, you’ve got what’s in the contract, nothing more. And if you start out in a position that you don’t really want to be, but you’re trusting that he’ll remember whatever he said, believe me, it’s not going to happen. Not least because he’ll have bigger things on his mind, and a higher valuation of his own role (as you will of yours) once the place starts hopping.
I know that you’re one of the most polite people in the world, and I suspect you’re not the most assertive. (I may be wrong.) I had to learn how to negotiate from my last business partner, who used to blow my mind when I’d hear her talking to prospective clients about money. She’d said things like, “You may not be aware of this but Kathy turned down three contracts in the last month, because she didn’t like the companies. She’s regarded as the top strategist in this business, and if you don’t want to pay her rates, we can put your account in the hands of one of our junior people.”
Whew. I was really grateful, because her negotiating kept a lot of money coming in, and more than that, it made the clients feel like we’d done them a favor by taking them on. So our relationships with them were a lot more respectful than if I’d done my usual “well, whatever you think is right” or “whatever you can afford.” Before we were partners, she actually helped me negotiate salary in my last job before I got into PR. She told me to tell them I wanted twice as much as they were offering, and remind them that I had 15 years experience in the field, and see what they did. What they did was meet me in the middle. And it took a couple of days for my knees to stop knocking.
Later, when she was gone, I had to do this for myself. And I think you’ve seen other posts where I talked about boundary issues in negotiations. This is what my hourly rate is. This is the contract with the non-negotiable clauses. This is what I need from you to get the job done. This is how long it will take to get results.
I’m not sure what you really want right now. I know you are really happy to get out of where you were living, and you feel comfortable with this other person. As I said earlier, a job may really be what you want, rather than a partnership. Just being involved in creating a new office is going to be a tremendous learning opportunity, whatever your position. And stability and a good income may be just the ticket to let you rebuild after this long stressful period.
But if it were me, I’d ask for equity, just for your commitment to building the business that will go beyond the commitment, energy and loyalty of any hired person. And then, I would sit down with him and decide who is going to be in charge of what, so you know where you’re decision-making authority is and where he makes the decisions. (If he has majority stake, he can always override you, but on a day-by-day basis, it’s really better for everyone to know who’s the go-to person.)
Or if he doesn’t want to give you equity, ask him which parts of the business he wants you to handle anyway. This is one of those crucial questions that helps to clarify everyone’s assumptions, helps keep you out of “but I thought …” territory.
Finally, I know I’ve said this before, but I’m saying it again, if equity is not in your original package, and not specifically mentioned in your employment contract, forget it, it’s not going to happen. Lawyers, accountants and bankers will all advise him against it for a lot of reasons. (I went through this when I wanted to give my employees equity stakes for performance or longevity.) If you want to be a partner, and it’s not happening at this company, put in a year and then start looking for what you want elsewhere.
bnd do get an employment contract, and a get a labor lawyer to look it over for you. If he quibbles, just tell him your lawyer insists. (Blaming the lawyer is time-honored negotiating ploy.) What you want is a self-renewing two-year contract with no-fault termination by either party after a year. The contract doesn’t mean much in terms of job protection after the year, but it’s a mutual expression of commitment that spells out things like insurance, holiday time, and liabilities (if you’re an employee you don’t have any because you’re protected by his business insurance).
Really finally, do yourself a favor and see if you can find any information on starting and managing an office like yours in books or on the Web. There are a lot of factors in different businesses, like profit margins, how much of those profits are reinvested in the company, normal operating procedures and expenses, marketing budgets, payment and accounting process, and probably in your business, dealing with third-party payers. You’ll get a lot more out of this experience if you do a little research on your own.
I hope I haven’t overwhelmed you. Good luck with all of it.
Kathy