Two Founders, One Vanishing Role
Three friends founded a Sofia food-delivery startup 18 months ago. Kalin owns 45%, Mira owns 35%, and Todor owns 20%. They have no shareholders' agreement beyond the incorporation documents. Kalin runs operations and works full time. Mira is the developer and works 30 hours a week. Todor contributed BGN 30,000 at the start, works about 5 hours a week on partnerships, and has recently stopped attending weekly meetings. The company has 14 couriers, 3 office staff, and monthly revenue of BGN 60,000 with a thin 4% margin. Mira has just told Kalin she is burned out and wants to reduce to 10 hours a week. Todor has asked for a monthly dividend, saying his capital deserves a return. Kalin is doing 60-hour weeks and feels the split is unfair.
1. Diagnose the governance and equity problems, and explain why the current arrangement is fragile.
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The core problem is that ownership percentages have been confused with contribution and with decision rights. A 45/35/20 split gives Kalin no majority, so any decision can be blocked by either other founder, and there is no shareholders' agreement defining deadlock resolution, vesting, or exit. Todor's 20% reflects an early cash contribution, not ongoing work, and he now wants dividends while contributing little. Mira's 35% reflects a full-time role she is about to reduce. If she cuts to 10 hours, her equity stays the same while her input falls, which will intensify Kalin's sense of unfairness. The company also has a thin 4% margin on BGN 60,000, or about BGN 2,400 a month, so a dividend to Todor would consume cash the business needs. The structure is fragile because it has no mechanism to adjust equity to contribution over time, no vesting, no buy-back terms, and no tie-breaker. In Bulgarian practice these issues are usually addressed through a founders' or shareholders' agreement rather than the incorporation deed alone, and the absence of one is the root risk.
2. Propose a concrete restructuring that addresses Mira's reduced hours and Todor's dividend request.
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Separate the three questions: work, ownership, and cash. For work, define roles and time commitments in writing and tie future equity or bonus to them. Mira's reduction should be met with a role change, for example moving her to part-time technical oversight with a reduced salary and a schedule for transferring knowledge to a replacement, rather than leaving her equity untouched with no adjustment. For ownership, introduce vesting and a buy-back option so that equity reflects sustained contribution; Todor's 20% can be confirmed but subject to a vesting schedule or a right of first refusal on transfer. For cash, explain that a dividend at a 4% margin would starve working capital, and offer Todor an alternative such as a deferred payment, a profit-share only above a cash reserve threshold, or buying back part of his stake. Kalin should also secure decision rights, for example a reserved-matters list and a casting vote on operational issues, agreed by all three in a written shareholders' agreement. The test of the proposal is whether it aligns each founder's reward with what they actually contribute going forward.