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  1. #1
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    Lightbulb Company going down the drain? ok time for a coup d’état

    Well I am in kind of in a delima here. I have been the partner of a successful webhosting company for over 6 years, and I have noticed that as every day goes by my partner loses enthusiasm for the business.

    The "down hill" spiral started around 3 years ago. When my partner and I started the company, everything was my idea but he was the one who put in the funds, and the only one who was of legal age at the time ( he was 19 and I was 13). When we first started the company, everything was running smoothly. Money was coming in, customers were happy, and our growth was tremendous. But then reality sat in. I was in high school, playing basketball, trying to be a normal kid, AND running a webhosting company at the same time. I told my partner that I would have to step down from the company until I graudated high school and went to college, as waking up at 4am to check a server problem and running in the bathroom to make a phone call was no longer working, and as you could imagine it put a lot of stress on a 16 year old kid. My partner and I agreed that this was the best thing for right now, and I would return once I went to college ( which is where I am now). I didn't stop working for the company, I just no longer accepted payment. For example, I would help with customer service when I had time, and would make sure things were running smoothly. As soon as I stepped down from being a full time employee to an "intern" I noticed that someone had logged into my email, and transfered the domain. I figured no big deal, as I would do the same thing if I were him to make sure the company was safe.

    Well fast forward a couple years down the road, and after growing a couple inches taller I am now back. But I have noticed that my partner doesn't have the same enthusiasm that he once had, and the company actually has less customers then it did a couple of years ago. Customers complain about poor customer service, and my partner goes days without checking important emails. He has other business ventures which bring him money now, so he doesn't take webhosting as serious as he once did, but at the same time he has to understand that you just can't kick a company you have worked so hard for to the curve. We sell dedicated servers, shared hosting, reseller hosting you name it, and it seems as if the only one who actually cares now is me and the outsourced support staff.

    Today I check our billing email address, and I notice that we have a disconnect notice from our datacenter. If my partner doesn't pay the bill today $XXXX, our servers will be disconnected today. Now more then likely he is going to pay the bill, but I am confused. Half of me wants to just do a "Coup d'état" and take over the company, while the other half wants to try and work things out.

    The reason I came back to web hosting, is because I actually found something that I enjoy doing. Most people hate what they do for a living, but I personally enjoy working for a webhosting company more than playing basketball, and I am a very gifted basketball player. I guess that is where my passion is since I started at a young age, and where my passion will stay I hope.


    My question to you is what should I do about the company? Should I take over the company and give him all profits for the next 5-6 months, or should I talk to him?

    I have talked to him in the past, but he always talks about how he is busy and doesn't have time for the company anymore. The biggest problem I see is if I transfer the company over to me, I will need a merchant account which I currently dont have. I am 19 now so I can get one which isn't a problem, but I am just confused right now. I want to do whats best for the customers as I could really care less how much $ I make out of this, but it's a company I created and I dont want to see it end this way.


    Excuse me for the poor spelling but I don't have time to double check at the moment.

    all comments are welcome!
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  2. #2
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    You take a few years off, come back, and want to take it over?

    You can't just 'take over' the company. Things don't work like that.
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  3. #3
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    Quote Originally Posted by adam View Post
    You take a few years off, come back, and want to take it over?

    You can't just 'take over' the company. Things don't work like that.
    Do you really think I was serious about doing a " take over"? If thats the conclusion you came to after reading then...............
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  4. #4
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    but it's a company I created and I dont want to see it end this way.
    Then you shouldnt of left it. Opportunity doesnt wait for you. Sounds like you need a heart to heart with your business partner. If he doesnt care to much for the business then ask if you can take over more of the operations to build it up again.

    Silly
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  5. #5
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    I currently run the company 100%, and have been for the past 3 months. The only thing I don't do is make payments. And I am not sure if I misrepresented myself in the post, but I never left. I just stopped taking payment. I was still helping with day to day, ( sometimes every other day) operations.
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  6. #6
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    What a story. If you have money to pay the servers, pay them and take over.
    Since both of you need to move on to different things, make him understand that he needs to move and you will "take care" of the company.
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  7. #7
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    Quote Originally Posted by Steve_Arm View Post
    What a story. If you have money to pay the servers, pay them and take over.
    Since both of you need to move on to different things, make him understand that he needs to move and you will "take care" of the company.
    If I could only go into more details.... But yes, it is a very difficult situation. Sometimes my partner goes 7-8 days without responding to emails. And in this business as plenty of you guys know, every hour is critical.
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  8. #8
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    Well, if the company doesn't produce much revenue for your parter to care anymore than and you want to take it over, offer him a price and buy the company off him.

    BTW, does the company produce over 10k month in revenue?
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  9. #9
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    Quote Originally Posted by Hulk View Post
    Do you really think I was serious about doing a " take over"? If thats the conclusion you came to after reading then...............
    Hmm..when you mention it more then once in the same post, then yes it is logical to believe people will come to that conclusion.
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  10. #10
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    Quote Originally Posted by Hulk View Post
    If I could only go into more details.... But yes, it is a very difficult situation. Sometimes my partner goes 7-8 days without responding to emails. And in this business as plenty of you guys know, every hour is critical.
    Well giving part of a story will only get you a part of an answer. It sounds like he will not allow this, or wont listen, might want to look at your legal options.

    Silly
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  11. #11
    just start your own company. Then you don't have to worry about such things anymore.
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  12. #12
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    Quote Originally Posted by hsphereclub View Post
    just start your own company. Then you don't have to worry about such things anymore.
    Would there be any legal consequences with regards to competition?
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  13. #13
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    Quote Originally Posted by Sillysoft View Post
    Well giving part of a story will only get you a part of an answer. It sounds like he will not allow this, or wont listen, might want to look at your legal options.

    Silly
    Nothing is under his name. He doesn't pay for anything.

    He has absolutely no legal rights whatsoever to this company. The owner could cut off his access and he could not legally do 1 thing about it.

    Quote Originally Posted by Sillysoft View Post
    Would there be any legal consequences with regards to competition?
    Not unless an NDA was signed.
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  14. #14
    Even if the clients decided to move over to his company on there own accord there is nothing illegal with it.
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  15. #15
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    Quote Originally Posted by hsphereclub View Post
    Even if the clients decided to move over to his company on there own accord there is nothing illegal with it.
    Just a question, Im not a legal expert. I just thought leaving a company to start another company that was in direct competition and that the customers for that previous company justs to the new company would be evidence enough for legal matters. But again Im no legal expert and Im sure Im going over the subject.

    But switching gears it sounds like the person doesnt have a lot of funds, its the other person who has no real interest in the web hosting part of the biz that has the funds. So starting his own business might not be realistic for this person?
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  16. #16
    Quote Originally Posted by Sillysoft View Post
    Just a question, Im not a legal expert. I just thought leaving a company to start another company that was in direct competition and that the customers for that previous company justs to the new company would be evidence enough for legal matters. But again Im no legal expert and Im sure Im going over the subject.

    But switching gears it sounds like the person doesnt have a lot of funds, its the other person who has no real interest in the web hosting part of the biz that has the funds. So starting his own business might not be realistic for this person?
    Unless he signed a contract stating he couldn't do it then there is nothing wrong with it. How can someone be in direct competition on a global market? If you think about it the guy was taking advantage of the kid since he was 13 and when the kid wasn't around doing all the work the company suffered. So I think he will be more successful doing things on his own and not worry about this guy at all.
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  17. #17
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    Quote Originally Posted by hsphereclub View Post
    Unless he signed a contract stating he couldn't do it then there is nothing wrong with it. How can someone be in direct competition on a global market? If you think about it the guy was taking advantage of the kid since he was 13 and when the kid wasn't around doing all the work the company suffered. So I think he will be more successful doing things on his own and not worry about this guy at all.
    Correct, assuming that they just slapped a business together with no paperwork just a hand shake then everything is fine. All Im saying is better safe then sorry. I wouldnt blindly go create another business without knowing the legal ramifications. I'd want to know what paperwork I signed if any. I guess Im just a paranoid person.

    Silly
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  18. #18
    Quote Originally Posted by Sillysoft View Post
    Correct, assuming that they just slapped a business together with no paperwork just a hand shake then everything is fine. All Im saying is better safe then sorry. I wouldnt blindly go create another business without knowing the legal ramifications. I'd want to know what paperwork I signed if any. I guess Im just a paranoid person.

    Silly
    If anyone should be concerned with legality it would be the guy who hired a 13 year old to run a hosting company. But that is just me. I wonder if a legal contract signed by a 13 year old would even hold up in court. I think unless it was signed by his legal guardian it would be meaningless.
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  19. #19
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    Quote Originally Posted by hsphereclub View Post
    If anyone should be concerned with legality it would be the guy who hired a 13 year old to run a hosting company. But that is just me. I wonder if a legal contract signed by a 13 year old would even hold up in court. I think unless it was signed by his legal guardian it would be meaningless.
    When I was 13 I was too busy playing video games and eating candy to worry about running a business...
    CloudRck.com - Host on Cloudrck
    Unmetered VPS Solutions at it's finest
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  20. #20
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    Quote Originally Posted by daejuanj View Post
    When I was 13 I was too busy playing video games and eating candy to worry about running a business...
    A few hosts start out by young people (teens) and a couple survive and are now big hosts.
    -Steven | u2-web, LLC - Clustered Shared Hosting
    "It is the mark of an educated mind to be able to entertain a thought without accepting it" -Aristotle
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  21. #21
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    I think there may be a simpler solution, assuming you get along with the guy well. It sounds like the business is a hassle to him, which means he's probably be happy to be get rid of it. Talk to him and offer to do him a favor and just take over the business. Don't even mention buying him out. At this point, just taking it over is providing value (it's freeing up his time) and he may just go for it.

    If not, I'm sure he'd be interested in any reasonable offer, perhaps part of future revenues for a short period, for example.
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  22. #22
    What do you think is best? Go with your gut feeling and make a rational decision.
    Last edited by ServerPlace4NET; 02-27-2008 at 07:02 PM.
    - Providing premium web hosting solutions since 2003
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  23. #23
    *delete double post*
    - Providing premium web hosting solutions since 2003
    |Managed Dedicated Servers | Shared Hosting | Web Design | Server Management |
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  24. #24
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    He pays for the company. He's owned it. He's ran it. You left and came back.

    You have no legal recourse whatsoever.
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  25. #25
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    mods please close the thread. I got the answers I wanted, thanks everyone!
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