Motion_Record_re_Directions_for_Service_(Part_1_of_2)_ret_20-Jan-2015

Everybody ran out of money – settled in  fizzle.

Hello World.

The author has been very busy the last few years, working on developing other fantastic things and taking care of his awesome kids.

Unfortunately, due to necessity, I have been drawn back into the muddy, murky world of of a Minority Shareholder caught in an Oppressive Action.

You will not believe what has been going on, since I last updated this blog in 2014!

Something happened in 2014 at the Private Company I own shares in. The Founder lets call him “Mike”; returned to the Company as CTO (Chief Technology Officer) with the mandate to develop product and patents for our Company. The Company began to pay out regular  and reasonable dividends, sales were growing, shareholder equity had been growing steadily at about 4M a year up to this point, things seem to all finally be going well.

I was going find out exactly how wrong I was!

More coming soon – need legal advice/clearance before I publish, so I don’t get sued….again!

Lol!

The benefits of investing early in a Private Corporation in Canada can be an extremely lucrative return. It is possible to achieve very impressive returns of 10-20X return IF invested in a successful Company (even higher if you invest in the “next Apple”) . The obvious downside is you can loose everything.

When deciding on an investment, research the market, calculate the growth potential of that market. What is the typical profit margin of other similar products. Compare to the size and profitability of other Companies in that market. Then research the market some more…

I suggest you do 3 scenarios, Poor, Average and Excellent. We will start with average. Based on your exhaustive research, calculate the profitability based on the average performance of similar product/Company in the market. Re-do your calculations based on the market leader and a successful product introduction this is your best case scenario. For the worst case you can research a dud NPI, or subtract 50% from the average case numbers.

If it appears even a worst case scenario could still be slightly profitable, this your the best bet for picking the next Apple.

Good Luck!

Document EVERYTHING. As soon as you suspect something is amiss. I can not stress the importance of this enough, your families financial future may depend on it. Carefully document anything that you feel is inappropriate, unfair, discriminatory and/or illegal as soon as you suspect anything inappropriate. Refer to your shareholder agreement, any employment contract you may have, workers rights under applicable labor laws and your rights as a shareholder.

If you have any “agreements” be sure to get them in writing. Don’t believe anything that is said to you verbally, until you have it backed up in writing. Document the conversation and send it to the person involved and ask them to confirm the documented conversation. This will be great help when the litigation commences. If possible, get backup copies of email and any relevant corporate documents.

By the time you begin to suspect you are being screwed – you probably are already screwed!

In my case, my “partners” were making poor/illegal business decisions and misusing Corporate funds, lying. When I complained to my “partners” about the effect it was having on my work and my health. They clammed up, I could not get a written answer from anyone in response to my simple questions or even what my job duties were supposed to be. This should have been a huge red flag, after a few months of this, I was terminated due to lack of work. This was immediately after I told (my “friend”) that based on my Doctors orders, I would have to go on stress leave, that I couldn’t continue to work under these conditions any longer without some immediate answers. They “laid me off” the next Monday.

Has anyone ever been through this – if you have, you can vouch – it’s pretty frustrating to say the least.

The Company I had helped start and build, was doing extremely well, sales approaching 5M/yr growth was over 100% YOY, the future growth potential was huge.

After I had designed and built their business systems, I was promised “we will always have a job for you” by my “friends and partners”.  That’s what was I was told when I discussed leaving the Company to distribute product on my own, .

This would prove to be a baldfaced lie, one of many that I should have immediately documented. Since they were my “friends and partners” I was satisfied with a verbal agreement. Don’t make this mistake – document all offers and promises.

Even if it is made by a “very close friend” get everything down in writing. It is sad, but you must do this to protect yourself, you cant trust anyone not even your best friend.

This Blog will cover my personal experiences and legal battles with a Privately held Company in Ontario that I invested in with some “friends”.

Let this Blog serve as a warning to others to be extremely careful when investing in a Private Corporation. Know your legal rights, know when you are being “screwed” by your business partners. We will try to cover topics such as you rights as a shareholder, access to Corporate information, what options are available under various legal approaches and the cost/benefit of these strategies.

Do not think for a second; “This will never happen to me, I can trust my partners”.

Once (big) money is involved you can not trust anyone. It would appear that even people you have known for 20 years will stab you in the back. Learn to spot the signs of an internal power grab, how to tell when they are lying to you. Protect yourself against these types of actions, be very careful, don’t sign anything without a lawyers advice. Never sign documents under pressure, “we need to get this done today” this is NOT going to be good for you, trust me. Make sure the date is correct, there are many reasons a Company will try and “backdate” a document. Usually it is an unscrupulous reason.

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