Having a minority stake = little control.

I’ve always wanted to run my own show—and I’ve done it a few times with moderate success. But one of the biggest lessons I’ve learned came from experiencing the real minority shareholder risks.

In my early twenties, I launched a marketing company that produced radio commercials for local businesses looking for something more impactful than what the local station was offering. It was a fun business.

Later, I built a new venture from scratch: a luxury brand of high-end cigar humidors, crafted by talented artisans. That one found some traction too. I got to work on some really unique and exciting projects with famous brands around the world.

Running your own show has its perks. But it’s also heavy. In both of those ventures, I hit a ceiling—I just couldn’t push to the next level without outside investment. And I wasn’t ready for that.

Eventually, I took a job as a designer with a more established company, one that had been growing steadily year over year. I knew there was potential to become a shareholder, and that day finally came. Papers were signed. Personal guarantees too. It all felt exciting—because it always does when things are going well.

But then things went bad. And that’s when the weight of what I had signed really hit.

Even though I had influence over decisions, I didn’t have control. That was a massive—and painful—lesson. My personal assets were tied to the company’s debt. When things spiraled, I had to consult with bankruptcy trustees. It became very clear, very quickly: I had everything on the line, but no real say in the decisions being made by those with majority control. That’s a sobering feeling.

One of the major minority shareholder risks I didn’t fully understand was how little influence I had when it came to the company’s direction. As much as I thought I had a say, my personal stake didn’t give me any control over the critical decisions.

So here’s something to think about—really think about—if you’re ever offered a minority share in a business. Make sure you’re genuinely okay with not having control. Or, if you’re stepping into that role, be proactive in structuring your shareholders’ agreement to protect yourself. Make sure you’re not left exposed when decisions are made that you don’t necessarily agree with, but could still be on the hook for.

Key Takeaways on Minority Shareholder Risks:

• Minority shareholder risks are often not fully realized until it’s too late.

• Understanding the limits of your influence is critical when entering a shareholder agreement.

• Protect yourself with a solid agreement that mitigates the exposure from decisions you may not agree with.

Like most of us, I desire comfort and predictability.  Boring can be good.  If I had to choose only one automobile option, I would choose ‘cruise control’ over anything else.  If you are fortunate enough to have a business that is on ‘cruise control’ – good for you.  You’ve likely worked very hard to get it to that point.

I have noticed, however that any time I have experienced significant growth in my life I have been uncomfortable, or forced into an uncomfortable job/role.

Many years ago, I was thrown into a role that was available because of someone who was fired.  It was a design position, and I new nothing about design.  I was told to ‘figure it out’.  It was a very uncomfortable situation, but proceeded to teach myself CAD – and ultimately converted the design department from very archaic 2D presentations to full 3D interactive presentations.  I taught myself, in the madness of the busy season, which ultimately this allowed me to lead the team in the modern world of 3D design and 3D photorealistic renderings.  Even better I ended up learning a skill that sky-rocked my self-esteem, and became a big part of what I do every day – design work.  I wasn’t highly educated, didn’t do all that well in school and used to struggle with many insecurities.  This was the first time in my life I felt ‘smart’ and could contribute to something at a high level.

Then decades later it happened again.  When COVID hit, I was forced into taking over the leadership of my Operations Team.  I knew nothing about Operations – yet got deep in the weeds to learn it.  This situation catapulted me into truly understanding my business, how it worked, and how to manage it properly.  It also gave me a fire in my belly, and a passion for building systems, operational stability and healthy team building.  I would never have become the person I am today if it weren’t for that crisis.

Even today, I am still forced into learning new way to lead a team, encourage vision, lead by example and to be the best boss that I can be by valuing people’s worth and value.

Any weight lifter will tell you that the only way to build muscle is to tear down those muscles, breaking fibres and allowing them to repair.

This doesn’t mean you can thrive or live well in a constant state of  being uncomfortable or under stress – the same body-builder will tell you that your muscles also need time to rest and rebuild to maintain a healthy state.

But the lesson here is to never shy away from taking on an uncomfortable challenge.

If you’re awful at dealing with confrontation and want to improve, practise healthy confrontation.  If you’re terrified of being in front of a crowd – try some public speaking, and you’ll be a better presenter and leader. If you’re bad at numbers, volunteer to present the month-end financials to your board, or partners.

You may just find that through this stress you will find your purpose, your passion and make massive forward momentum for both your company and yourself.

Growth and comfort cannot co-exist for too long.

My business coach one time told me that the most significant piece of advice that his business coach gave him was to ‘own the whole‘.  As he said this to me, and I didn’t quite understand.

I was responsible for the Design Department and I did that very well.  When I found out that my business was in complete implosion crisis situation – (I’m talking nuclear meltdown level) – I was shocked and could not believe it.  I blamed everyone for failing to do their jobs.  I blamed the GM. I blamed the other department heads.  I blamed the accountant. blamed the majority shareholders for not caring.  I blamed the previous owners whom I bought the company from for selling me a house of cards.  I blamed my partners.  I blamed everyone but myself.

What I failed to do – was ‘Own the whole‘.  And after a few weeks of contemplating what my business coach told me, I finally understood.

Owning the whole was a state of mind: Everything is your responsibility.

Even though I was not directly responsible for the sales department, I needed a base understanding of how things work in order for me to question practises in my own business.

Even though I was not directly responsible for finance, I still needed a basic understanding of how cashflow, expenses and receivables work so I could catch anomalies in monthly reports or statements.

Not being directly responsible in Operations, still meant that I needed to step in and ask questions and challenge purchasing plans.

I was so focused on my department alone – that I spent no time understanding other departments.  And by doing this, I was an awful shareholder, and partner.  I not only let my partners down, but I let down my whole staff.  I was a garbage leader.  My staff trusted me to run my business because their livelihoods depended upon it.  Because of my negligence, good people got laid off and all of us nearly lost our jobs.

No-one is going to care about your business the way you do.  If everything collapses, team members will find other jobs.  On the other hand, you’ll likely lose your house.

Ask questions.  Understand how the department works.  Trust but verify.  Hold people accountable.

It nearly cost me everything.

Eddie

BEING ABLE TO SET SOMETHING ASIDE FOR FUTURE GAIN.

We all work hard. We all deserve what we work hard for. I had an experience that re-shaped my mindset.

I have always loved old rugged vehicles. I think I secretly want to be Indiana Jones. My daughter has followed in my footsteps, and has a vagabond heart – and has been to more places on earth than I can dream of. Among these include a summer long tall-ship sailing expedition in the South Pacific, a 1 year teaching stint in South Korea, and an archaeological dig at a dark ages cemetery in Poland.

Anyways, back in 2002 I purchased a 1954 Land Rover Series 1. Basically a parts vehicle. It didn’t run, and it needed a full rebuild. I purchased it, and brought it back with my son in May of ____