Since 2014 I have been a judge for the Auckland Chamber of Commerce Best Emerging Business Awards. Ten years, sitting inside growth-stage businesses, reading their numbers, asking their founders and directors hard questions about how the business actually runs.
There is a pattern I have seen so consistently it stopped surprising me some years ago. When I ask an owner what happens to their shareholding if something happens to them, the answer is often vague. When I ask what their spouse or partner knows about it, the answer is usually silence.
This is not a story about one type of business. I have seen it in businesses with a single founder, where the shareholding sits with them and, on paper, one other family member. I have seen it just as often, and just as starkly, in businesses with two, three or four unrelated shareholders, co-founders, early hires who bought in, people who built something together and structured it properly on the commercial side, but never quite got to the conversation about what happens to their ownership if one of them can no longer continue.
The business is structured. The household usually isn't told.
What strikes me, sitting across the table from these founders, is how much thought goes into the commercial structure and how little goes into what it means for the people at home. A director will walk me through their growth strategy, their capital structure, their exit multiple, in detail. Ask what their partner would inherit, or what their partner might be expected to fund if a co-shareholder exited, and the room goes quiet.
It is not that these owners do not care about their families. It is that the shareholding lives entirely inside the business conversation, and the household lives entirely outside it. Nobody built a bridge between the two, so nobody walks across it until they have to.
Multi-shareholder businesses make this worse, not better.
There is a common assumption that shared ownership spreads risk. In one sense it does. In another, it multiplies the number of households quietly exposed. Every additional shareholder is another family who may inherit a stake they do not want, and another set of remaining shareholders whose families may be asked to help fund a buyout they never budgeted for. The more shareholders, the more silent partners standing behind the business, each one a last-to-know.
What changes this.
It is a short conversation, and it changes everything downstream. Sit down with whoever is connected to your shareholding and tell them three things: what they would inherit, whether it is something they would want, and whether an agreement exists to fund the alternative. That conversation costs nothing and takes twenty minutes. The absence of it has cost families a great deal more.
If you are a business owner reading this, have that conversation this month. If you are the spouse or partner of one, ask for it.
If you want a starting point today, make contact with me via the contact page on the website. We can then discuss your situation and the steps to support you.
The content shared here is general in nature and designed to broaden your financial knowledge. It is not personalised financial advice. For advice specific to your circumstances, I recommend speaking with a licenced financial adviser. You can also reach out via the Contact tab to start a conversation with me directly.