Our old family friend and investor could sink our new start-up. Help!

Dear Aunty B,

I am a 22-year-old girl who has started a company with my father and my aunty (she’s actually a family friend of years) a couple of months ago.

We recently had a little misunderstanding and she has been very rude to my dad and I. We have always known her to be very aggressive but lately she has been overreacting over the big mess up that we had (it was unintentional).

She has been writing very rude and insulting letters to my dad and I. She says they are business letters and calls me names when I call her to try to clear the air. She claims I am not being professional even though I am juggling my final year and starting up a business.

My aunty disappeared for three weeks to her mother’s house and did not return any of our calls. We had to constantly contact her husband who wants nothing to do with this whole fiasco.

In terms of money, my dad was initially supposed to finance the business, but my aunty and her husband offered to also contribute. After the misunderstanding, she abruptly asked my father to pay her every cent she has put into the company, although my father has been funding more than 90% of the company.

Knowing that my dad has already sold his house to fund the business and that we have been out of a job for the past 30 months, I am so saddened that she of all people could act so coldly towards my family.

She has been a part of my life since I was five and now she has burnt the bridge to such a beautiful friendship. I have been told to just let it go and be humble about it. I don’t how much longer I can do it, though. I feel so belittled and disappointed by her behaviour.

Shania Twain

Melbourne

Dear Shania,

What a horribly messy situation you are in – I can understand the alias!

This is why you need to be very careful before you decide to go into business with a partner or partners – whether they are real family or old friends.

Unfortunately, people act differently in business than they do outside of work. Money changes everything and you need to have a good sense of how your old relationship will change well before you go into business.

Frankly, it doesn’t sound like you did that. Or if you did, you tried to ignore some of your concerns. You knew that your aunty had an aggressive temperament, so it shouldn’t come as a surprise that she’s being even more aggressive now she feels she has lost money.

I’m not sure whether you have a shareholders’ agreement in place – I fear you don’t. A shareholders’ agreement would have set out exactly what occurs during a dispute between you and your aunty – whether, for example, she would have the right to ask your dad to refund her start-up capital.

Either way, I think you need to get your aunty out of this business: pay back her money, offer her some compensation, promise a payment down the track. But she’s certainly not going to help this business fly and you need to end the relationship – even if that means ending the friendship.

Be smart,

Your Aunty B

Email your questions, problems and issues to auntyb@smartcompany.com.au right now!