Reforms reduce tension among minority owners

The opportunities for involvement and information that privately held companies extend to investors who are strangers are rarely extended to shareholders who are relatives. In my experience, few family businesses provide their minority shareholders with even one of three critical protections most investment bankers, venture capitalists and private equity investors insist on before purchasing a minority interest in a privately held company. Majority owners of family businesses often view a family member’s request for even one of these protections to be almost a declaration of war.

The three protections are:

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