When you’re running a business, victories aren’t only about big clients or exits. They can be those rare moments that redefine your company and who you are as an entrepreneur. Corrine Sandler, CEO of Toronto-based market research firm Fresh Intelligence, recently won just such a victory when she bought out the partner who had helped her start the company—but whose lingering presence was limiting Sandler’s vision for the business. The process, which took months, was at times stressful and uncomfortable but, as Sandler tells PROFIT’s Deborah Aarts, gave her the kind of entrepreneurial life she had always wanted.
Tell me how the partnership came about.
When I started the company in 2009, I needed money, so I gave away a minority share for some capital. My partner was a very successful businessman. I was a young entrepreneur—very green. So we ended up with a shareholder’s agreement that gave him control over a number of factors related to operations and [finances], even though he only owned a minority.
My frustration had escalated to the point where I was feeling so much hostility toward my partner. I had to make a play before it was too late
At what point did you realize that the partnership wasn’t working?
I was experiencing frustration within the first two years. I wanted him to be in a sales role, but he was more interested in operating behind the scenes. We were thinking differently. But I had no idea how to arrange a buyout, nor did I have the resources. By the end of 2012, though, my frustration had escalated to the point where I was feeling so much hostility toward him. I just knew it was time to take the company in a new direction. I had to make a play before it was too late.
How did you let him know?
First, I approached him in person. I explained that I wanted to buy him out. There was a lot of emotion. He rejected the idea and I realized I wasn’t able to deal with him on my own, so I approached a friend who had been through dissolving a partnership. Under his guidance, I put together a term sheet based on the company valuation. That way, my partner couldn’t blow off my request with a “Yeah, yeah, you’re just having an emotional day.” But once again, he blew up.
Sounds volatile. How did you resolve things?
I stepped back again to figure out my company’s financing capabilities and see some lawyers—three of them. I wanted to have every base covered because there was no shotgun clause in our agreement. I couldn’t force him out. Basically, I spent three months building up my ammunition. I took the emotion out of it and built a plan for executing the buyout. That, I think, was the smartest thing I did.
Then, using a legal representative, I sent a letter indicating my goal: that I wanted this done as soon as possible and, if he wasn’t prepared to come to the table, what the consequences would be. I’d done my homework. I think this made my partner realize that the marriage, as they say, was over. He signed off on my term sheet.
How did you manage to work with your partner through this period?
Previously, we had weekly meetings. I cancelled them all. I refused to answer any emails he sent. Also, I didn’t negotiate with him directly but with an intermediary he’d entrusted. That was great. When there’s so much emotion, you may say things you regret that can be held against you.
Are you in touch with him these days?
Believe it or not, we’re still friends. I’m happy it didn’t go on any longer, though, because things might have become ugly.
What has the experience taught you?
If I could do it again, I wouldn’t have waited—those two years cost me a fortune based on our growth since. If you feel in your gut it’s not working, don’t wait.
How has sole ownership changed the business and your role?
I haven’t seen a financial reward yet, but it’s not about that. I wanted to be able to take all the risk at the same time as have the reward. I wanted to define my own destiny. To me, business isn’t about getting ahead of others; it’s about getting ahead of myself, breaking my own records. I now report to myself. I’m able to make better decisions without having to run everything by someone else—that’s a huge weight off my shoulders. It was the best decision I ever made.