'AITA for refusing my uncle’s offer after I basically built his business from scratch?'
"AITA for refusing my uncle’s offer after I basically built his business from scratch?"
I (34M) have been operating alongside my uncle in a family business. I have been hands-on in it since its inception, such as coming up with the name, applying for the license, designing the brand, and building out the operations.
I have been in the corporate world for 13 years. My uncle put in some money at the start ($100k and had my aunt find the rest), but for me, my experience at major companies had real value. I have spent the last two years focusing on building real business systems, marketing, community programs, vendor relationships, and events.
Meanwhile, I had been sacrificing a lot as well, such as staying in a corporate career where I was earning close to 200k a year with the benefit of PTO, tuition reimbursement, 401k matching, and health insurance.
I'm now in a position where I'm paying for my own MBA, my health insurance, and have a decreased financial level of security. Overall, I would estimate that I have lost well over 100k in income and benefits during the time frame that I joined my uncle.
Eventually, my uncle came to me with a meager single digit equity stake in the company and a low salary offer to match. I couldn't agree to it and pushed back, offering to to make it worth my while to stay, I’d need at least adjusted, double digit equity.
I don’t think it’s unreasonable considering all I’ve done. He only found the location of the company and he manages inventory. That’s it. No bill paying, strategy, nothing. My family thinks I should just be grateful. I don’t.
The internet had a lot of thoughts to share.
ih8pepl wrote:
How much would that business be worth if you started a competing one? I mean just take a look at the story of Blockbuster Video and Netflix. Netflix went to Blockbuster to try sell them their business concept and Blockbuster laughed at them and said no.
Netflix secured finance and launched their business. Not long after it is bye bye Blockbuster. With your knowledge, experience and work ethic I am sure you could start a competing business that will win business from your uncle. I'm not saying you should, but maybe you should point that out to him.
opine704 wrote:
NTA. I'm not going to address the specific financing, the risk, any of that. AT the end of the day they are playing the "Family" card to get you to commit your time, effort, and skill to uncle's business. And they're using "Family" as the reason to pay you less than market value without offering an equity stake that helps compensate you. Walk away.
crossy1686 wrote:
What were your expectations coming in? Why did you put all that effort in? Presumably you thought you were going to get co-ownership or something? This issue could have been avoided with a conversation before you even began working together.
You say you have a lot of experience in this field but if you did you’d know that single digit equity is fair. If your uncle needs to raise investment he will have to sell off most of his equity while you won’t have to sell anything. He could end up in a position where he isn’t the majority shareholder anymore and some VC is.
You’re NTA but your entitlement ITAH. I don’t know why you wouldn’t just go back to making almost $200k a year if that’s a realistic option. Sounds way better than what you’re currently doing. Unless of course you truly believe the company has potential to make you a multi millionaire, in which case you should take your uncles offer.
ScaryButterscotch747 wrote:
I find it difficult to believe that you are so good at business…and were so integral to this operation…that you would quit a $200k pa job… and put in so much effort…without proper corporate governance in place. It’s business 101.
Like negotiate a salary plus options. Or have a partnership agreement. Be the beneficiary of a trust. Be a shareholder in a company and have a shareholder agreement. Working this out would have cost you a meager $500 consultation with a lawyer.
YTA because it sounds like you are over-estimating your value. Without an agreement, you just gave your services for free (if you volunteered) or took a demotion (if you received a regular paycheck). If you are so good at business strategy… what is your plan for when your uncle takes everything that you set up and decides that he will not give you 8% of his business after all?
UrsulaVonTwinkle wrote:
If he doesn't wanna compensate you what you know you're worth, leave him to it. When family complains, tell them he should be grateful for the help you provided and leave it at that. You have to look after yourself, because he certainly isn't going to.
gnowZ474 wrote:
NTA. Just start your own company already.
quick-possession-345 wrote:
You should have worked out your equity stake before you spent all of your time and energy. Let him do what he wants with the business. Wait for him to come back to you with a real offer when he realized what you do.
NTA.
Jocelyn-1973 wrote:
So...you had a job where you earned 200k per year plus benefits, and then you joined your uncle to start a new business, but you didn't make an agreement about your future payment, while taking a huge payment cut? That doesn't really sound like someone who earns 200k plus benefits.