Find someone to buy my shares - is this a thing?

[dsullivan00]

Hi all, I own a financial agency with two others - we're all 1/3 shareholders and directors of the company.

I feel it's time for me to move onto pastures new, but my business partners don't want to buy me out and would rather bring in a third party, who could potentially bring something to the business. My shares are currently worth about £300k. It's a growing company that's seen average 40% growth over the past 3 years, established for 8.

Is this a thing? I wouldn't have a clue where to find someone who'd be interested in buying my shares and joining the company. Is there a place where I'd find such a person? Thanks!

 

[WaveJumper]

In the first instance the best bet would be too put the word out in the financial circles you move in someone who knows the business may well be interested. What does your share holders agreement say on this topic, will the other share holders have any say in this

 

[NickGrogan]

If the company is growing at 40% per year, why would you want to sell your shares?

What dividends are you currently getting?

 

[fisicx]

Keep the shares and get free money each year for doing nothing.

All you need to do is resign as a director and it’s easy street from that moment onwards.

 

[Mark T Jones]

Shares in private companies are generally considered to be illiquid - only really of value to those within the business (or those coming in)

Whatever method if valuation you've used is likely to be optimistic- possibly wildly so.

As others have said, resign as a director, move on and keep discussion open on your shareholding

 

[Lisa Thomas]

You can resign as a director and still be a shareholder...

 

[HFE Signs]

If you resign, will that have any impact on the business? It's all very well resigning, but if that forces the company into decline it might not be the best option initially

 

[Paul Kelly ICHYB]

What does your share holders agreement say about selling your shares? Drag & tag?

 

[Porky]

@dsullivan00
Is it growth capital they need?
Not sure what financial business you are in or how your enterprise value stacks up at £900k but sounds like you want some sort of MBO so need to find a small regional VC or Private Equity group that might be interested in Investing for a chunk of the share capital. Part of the investment could then be used to buy you out. The other two then go on and use the development capital to expand the business.
This is not as easy as it sounds as its similar to selling your business and is a long drawn out process. But its players like BGF Capital you need to be talking to. Although your EV might be too small for them but this is the sort of direction you might need to go in:-

Home

BGF is the most active equity investor in the UK and Ireland, providing long-term, minority investment to growing companies.

www.bgf.co.uk

Another you could try could be someone like LDC to see if they would support, if they were interested the injected capital could buy you out and allow the business expand:-

LDC Private Equity Investment Firm | Trusted with Ambition®

LDC - Leading UK mid-market private equity firm. Contact our offices across the UK for investment opportunities and business support.

ldc.co.uk

It sounds like this could be the direction of travel you are looking for maybe? Otherwise, the only other angle i can think of would be to look for an Angel Investor that may want to be hands on in the business and take over your position or invest enough to buy you out and help find staff members to help grow the business but again that would be a challenge:-

UK Angel Investment Network - Business Angels, Entrepreneurs & Angel Investors

The UK Angel Investment Network connects business entrepreneurs with Angel Investors. Find an Investor for your business, or access a network of investment opportunities.

www.angelinvestmentnetwork.co.uk

Good luck to you.

 

[numbersrule]

One Director out of three is a significant part of the business.
The other Directors, I suspect, need you or alternatively someone with your skill set, to maintain the current positive outlook.
There are some Company Constitutions which require Directors to relinquish their shares on departure.
Remember that if your desire for pastures new is just a positive thought for the next great thing, having already contributed to one great thing, remember great things are not often frequent and consecutive.
I'd be really interested if you could divulge how you've arrived at the 900k valuation.

 

[Lisa Thomas]

If you resign, will that have any impact on the business? It's all very well resigning, but if that forces the company into decline it might not be the best option initially

It might sharpen up the other shareholders to buy the shares/be proactive.

 

[Lisa Thomas]

What does your share holders agreement say about selling your shares? Drag & tag?

Paul - I've never heard that expression before - can you explain please?

 

[Porky]

Hi Lisa,

The drag along clause requires the minor shareholder to sell their shares.The tag along clause requires the minor shareholder to be allowed to join in on a sale. Both clauses are designed to give the minor shareholder the rights to receive the same price, terms and conditions as any other seller.

That’s what Paul refers to. I have added this myself a number of times into different company main articles especially where I have used crowd funding or been faced with a higher number of shareholders with low level holdings.

 

[Lisa Thomas]

Thank you, Porky.