Can I sell off part of my business without losing control?
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Buying a Business
Hi Philip
Yes, you can sell off part of your business and keep control.
In general there are two types of situations when selling off part of your business is viable
- raising capital to expand your business
- progressive sell down when you are heading towards retirement
Naturally any new investors will consider whether the corporate governance arrangements can sufficiently protect their minority investment, which is usually done through a shareholders agreement. Shareholders agreements may cover issues such as directors, sale of shares, approval of major transactions, dividends, reporting and liquidity
I am particularly a fan of the progressive sell down, as part of an exit planning exercise
Jef Lippiatt, Owner at Startup Chucktown
Peter is absolutely correct. However, I'd like to add that one other situation I can see is more about expanding your business. Perhaps running everything on your own is becoming overwhelming so you add a business partner with a different set of skills. You could still keep the majority as you've built the business but split off some of the equity so they have skin in the game.