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Comment by scarface74 | Hacker News Reader

When I first saw the title, I thought this guy was a jerk. My success is my wife's success.

But if it is a business and she would get half of his interest in the business, couldn't that cause hardships on the other partners and allow her to make decisions that are detrimental to the business?

Could he have her sign a fair postnup saying she would get half of any financial interests in the business but no voting rights or that the partners would have automatic rights to buy her out?

I could see all sorts of ways that this could be fair to her but still protect his partners.

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IANAL, but you're describing a buy-sell agreement, which would cover what would happen to business assets in various death / divorce / firing scenarios. Often, you would agree to sell your assets back to the company in the event that you no longer have direct involvement with the company. If the assets pass to her through divorce, the agreement would still bind the shares, so he doesn't technically need a nuptial agreement for this.

Yeah, some of the comments in the thread allude to that possibility. If it's a matter of protecting business interests though, there are much more tactful ways of bringing that up with one's spouse.

If that was the only reason, that would be the first thing out of my mouth. I'd absolutely make sure she knew it was a business formality done to reassure investors. But she said that he has never mentioned anything along those lines. Sadly, I think people are being way too optimistic about his reasons.

> If that was the only reason, that would be the first thing out of my mouth. I'd absolutely make sure she knew it was a business formality done to reassure investors. But she said that he has never mentioned anything along those lines. Sadly, I think people are being way too optimistic about his reasons.

Not every person is a great diplomat.

I'm not sure you need a prenup for that. You can agree in a shareholders agreement that there is a requirement to offer the shares up for sale (at fair market value) to the other shareholders in the event of the shareholder passing away. Not sure about Delaware law, but this works in most of Europe.

Alternatively there could be a provision of swapping "Shares B" for "Shares A" or similar with different voting or veto rights. I think this is also possible in the US, since something similar was done for Facebook? Mark has special voting rights but his inheritors will not?

Shareholders may not have the liquidity to buy out those shares at that time.

I'm not sure, but I think a forced sale requirement would be problematic in the US since it would impose a unilateral obligation on the survivor/divorcee that had not been bargained for by them.

I question the probity of such arrangements as well as special voting or non-voting stock. This is exactly the sort of thing that leads people to conclude that capitalism is rigged.

Why does that make the system "rigged"? If you start a tech firm with four developers and one of the lawyers get a divorce, do you want his ex to have any voting rights when it comes to strategy?

It seems like your comment has several unspoken assumptions that I'm unclear on, but yeah, I do. Insofar as financial instruments are fungible/transferable, they ought to be transparently so. Once you start creating different classes of financial interest, some with decision-making power and some without, you're creating a tiered system and those with the decision power are both incentivized and empowered to put their own interests over others'.

The basic notion of capitalism is that property rights + free markets = optimal economic growth. As soon as you start creating different classes of ownership you're signalling that that's a actually a fiction.

Insofar as financial instruments are fungible/transferable, they ought to be transparently so. On

It's not about the financial instruments. I'm making the assumption that a "side project" that the spouse did with a few of his friends wasn't capital intensive, and it was knowledge based. As a software developer, if I were to start a business, it wouldn't be capital intensive at all. I would need partners that brought a set of skills to the table - maybe a few developers and a person with a marketing background or industry connections. The only costs besides time would be a bunch of AWS resources. The "investments" in my company wouldn't be financial, they would be expertise. Why would one assume that the person's spouse would have the expertise to make intelligent strategic decisions on the direction of the company? What if it were a law firm?

Do you think that Carl Icahn or Baine Capital have the same set of incentives as the employees or the founders of a company? They want to make their money and get out, their time horizon is a lot shorter.

The same could be said of the spouse of a founder. As founders, we would be more likely to care about the long term vision of the company. The spouse may just want to make any money she can right now.

If Mark Zuckerburg hadn't kept a controlling interest in Facebook, would it be where it is today? What if he had sold a controlling interest to Yahoo under pressure from the VCs?

Can a shareholders agreement be binding on the spouse or would the spouse also have to sign it?

So what? Inheritance of a partnership interest isn't a new situation (other than for these people). If the first thing you worry about with regard to a business is how to limit future involvement of other people, that suggests the objective is to hoard money rather than grow it.

It's not necessarily to "hoard money". If I start a company with three technical people and a person with a good business background and we all have voting rights because I trust their judgement, why would I want to have someone else come in with decision making power whose judgement I don't trust? Not necessarily even because that other person as ill intent, but maybe they just don't have the background of the original founders.

If I started a business with a friend because I trusted his business instincts and he passed or they divorced, I would be fine with her benefiting financially as much as she would if they were still married but I wouldn't want her being able to make any strategic decisions.

Why are you assuming the surviving partners necessarily has worse judgment than the person you originally went into business with? It sounds like you're arguing from a default position of not trusting other people and needing to defend your enterprise against outsiders, which is likely to be a limiting factor on business growth sooner or alter. You might be better off with a professional corporate structure, like a legal partnership.

Facebook and Google both have founders who have more voting rights than their ownership stake would usually allow.

But in the case of the Reddit thread, it seems like her spouses business is more like a partnership. Even with a legal partnership, she is a joint owner in the partnership by default unless some other arrangement is made.

Just to emphasize, if the purpose of the postnup is to keep her from benefiting financially from "his" success while they are married, I find that completely distasteful. But if the purpose is to protect the integrity of the partnership, I don't see a problem with that.

I don't think my wife would want to have any part of the day to day decision making of a computer related company I started and let's assume I wouldn't ask her for a postnup and ask her to sign something on the event of my death that would allow her to be bought out at a fair value or allow her to keep her equity but it be non voting.

> My success is my wife's success.

What about your failures ? What if you end up commiting a crime, will your wife have share in that ?

She might when it comes to asset forfeiture time.

To add on to what the other poster said. If I don't pay all of the taxes that I should and we file jointly, my wife is just as liable as I am. If I file bankruptcy, my wife will be affected. If I started my hypothetical business, charged credit cards and didn't pay them (especially in a community property state), they could come after her resources.

If I make dumb decisions, my whole family is affected.

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