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Episode Summary
You’ve built the business and one of your kids actually wants to run it. The other three don’t. Or you think one of them does, but you’ve never actually asked. And nobody at the dinner table has said the quiet part out loud about who’s capable, who’s interested, and who’s just been cashing a paycheck for fifteen years. I had Jon Schindel on, a Minneapolis business attorney who spends his days walking families through this exact mess. We got into why the first meeting with him is a listening meeting, not a solutions meeting. Why creating different share classes (voting for operators, non-voting for the siblings who still share in the financial upside) protects the next leader from a board full of uninformed siblings. How to separate salary for the kid running the company from distributions to the kids who aren’t. Why most parents have never thought about sending the successor to the bank for a loan instead of carrying the note themselves. And the two questions every owner has to answer before any of this works honestly: an honest read on each kid, and whether the buyout is for retirement income or for legacy. Jon’s family cabin analogy lands the whole thing.
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## Top 10 Takeaways- Your first succession meeting should be a listening meeting. If you’re getting five solutions on day one, slow down.
- Your kids are not equal in interest or capability. Pretending they are sets your next leader up to fail.
- Salary for the kid running the company is a separate conversation from distributions to the kids who aren’t.
- Equal voting shares for uninvolved siblings will undermine your successor’s ability to actually run the business.
- Create share classes: voting for operators, non-voting for siblings who still share in the financial upside.
- You can’t split the pie without a valuation. Everything downstream of succession depends on knowing what the shares are worth.
- The shareholder agreement protects the company first. A sibling’s personal cash crunch can’t dictate a buyout that craters cash flow.
- Your established company can probably get a bank loan. Sending your successor to the bank takes the financing risk off your retirement.
- Two paths exist: you need the buyout for retirement, or you don’t. Each builds a completely different deal.
- Surprises are the failure pattern. If a kid learns their role from a lawyer’s email, you’ve already lost.
Sound Bites
“When the trouble hits is when Mom and Dad are gone and not everybody really is equal in their use of the cabin or how they use the cabin. The same is true in business.” (@TBD) — Jon Schindel
“Something that can really hurt a company is to have all the siblings with equal voice despite some of them not participating in the company. That really undermines the next leader of the company.” (@TBD) — Jon Schindel
“You’ve got an established company that has financial documentation. Banks would be climbing all over themselves to finance your buyout, and you get all your money up front and eliminate all your risk.” (@TBD) — Jon Schindel
“If someone finds out they’re not going to be the president of the company in an email from a lawyer, well, that’s just a bad idea. Have the hard conversation. It’s just not worth the BS.” (@TBD) — Jon Schindel
About This Episode
Jon Schindel is a partner at Seilers Schindel, a Minneapolis business law firm he has co-led since 2011. He came to law later in life after six years in technology sales, which gives him an operator’s perspective on legal work rather than a pure academic one. A significant portion of his practice is family business succession: shareholder agreement architecture, share-class design, buyout financing, and the parent-to-kid handoff that breaks more often than it works. This is the first of multiple conversations with Jon on the show.
Resources Mentioned
- Seilers Schindel — Jon’s firm. — seilersschindel.com
Connections
Phase + Module:
- Module 1 — Ownership Goals — The honest “why” behind the transition that Jon says parents have to answer before anything else
- Module 9 — Operator Transition — The successor handoff, share-class architecture, and timing
Concepts referenced:
- The Owner-Operator Trap™ — The parent walking the halls because the company is their identity
- Three Lenses of Value — Separating the value of the company from how the proceeds get split across the estate