To start with, here is a little bit of a timeline that lead to me being offered ownership at my current firm.
2015-2017 Associates in Architectural Technology 2016-2019 Worked at a small design firm 2019-2021 Worked at my current firm as a designer 2021 Became a licensed architect and started managing and designing my own projects. 2024 Offered an option to buy in.
This all sounds amazing on paper, especially at only 27 years old. However, in 2020, I also started a residential design firm on the side since my employer allowed side residential work. It’s been growing the past 4 years and now has the potential to be my full time gig.
Im not quite ready to start on the residential stuff full time, but need to give the firm an answer tomorrow. How do I say not right now, without burning the bridge, getting let go tomorrow, and still leaving that door open in the future should the residential side not work out or not be what I had hoped?
Sorry for the long winded first post, but I really appreciate any insight.
thanks!
archanonymous
May 2, 24 7:29 am
You just need to say "yeah, let's do it"
Then follow up with demands for a timeline that is really generous - 2-3 years. You need to review financials, your lawyer needs to review financials, you need to do a test run, find out how much the buy in is, get the buy-in money together, etc....
I think you have a lot longer than just tomorrow.
Wood Guy
May 2, 24 9:13 am
That's pretty similar to what I did, though I was older at the time. I was honest that I wasn't sure that ownership was right for me but that I was very willing to consider it. I got a raise and was included in all major business meetings and decisions for a couple of years, which was a great education, before deciding that it wasn't going to work out.
Non Sequitur
May 2, 24 12:23 pm
WG, I'm looking at the same thing ATM. Discussions opened up late last year and I expect they will be ongoing for the next fiscal. Window is 5y give or take so it will take time but I have great advisors on my side who've given me plenty of advice and warnings.
bowling_ball
May 2, 24 5:59 pm
I'd say the process in my case was about 3 years of mentorship (of varying quality) leading up to the actual conversation, then 18 months with financials, lawyers, etc. If they actually want a partner and aren't just looking for a cash infusion, they'll understand that you aren't ready just yet and need to do your homework.
Wood Guy
May 3, 24 10:56 am
Non, that's great--keep us posted! One thing I've learned is that a successful firm will have one principal who is great at sales, one who is great at design, and one who is great at managing a team and getting things done. From things you've said, it seems to me that you're probably the third type of person, but maybe you're good at the other things too. Or are there other principals (or principals-to-be) who are good at them? No worries if you don't want to discuss it here.
Non Sequitur
May 3, 24 11:35 am
WG, I'm sure I'll write something more in depth when the time comes but your assumptions are not wrong. The problem on my hands at the moment is that the main partner responsible for points 1 and 2 is heading out and I don't see any of the other equity members filling that gap. I'm mostly 3 and can 2 if required but there are many unknows.
Chad Miller
May 2, 24 9:53 am
A few questions:
1. What type of buy in is this?
managing partner?
profit sharing?
non managing partnership?
2. How many shares of the company are you buying?
3. How many total shares of the company are there?
4. If you're a voting partner (managing) how is your vote weighted?
vote weighted based on amount of stock owned?
equal weight for each vote?
5. Have you see the firms financials?
6. Is there a noncompete? (if in the US may not be allowed)
7. Is there a nondisclosure?
8. What are the procedures if you decide to sell your shares in the company?
It's normal for a firm to give you a couple of months after the initial offer to allow you speak to your lawyer, see the firms books, review your personal finances, ect BEFORE they ask you to buy in.
Josh Mings
May 2, 24 10:19 am
Yeah if they're expecting a snap answer without having the chance to see the books, get counsel, etc... that's a red flag
Chad Miller
May 2, 24 10:42 am
/\ This. Also - some old school partners think that if you're a partner you need to work crazy overtime. While your hours a week will increase if you're a managing partner, it shouldn't be a crazy amount. If you were doing 40 hours a week you'll be doing 50 hours a week once you get the hang of your new new responsibilities.
If this is just a profit sharing buy in your hours shouldn't increase at all.
Richard Balkins
May 2, 24 11:52 am
That should be the case especially if you aren't the sole managing partner doing the work and that there are others forming a team. If it was just you then the hours would be longer but 50 hours should be normal and maybe up to ~60 hours a week on some weeks during busy times. Early on, it might take you 60-70 hours a week to do all the stuff as a managing partner but taper down to around 45-60 hours a week as you get a hang of the new responsibilities. An occasional long heavy week will occur. However, it shouldn't be most of the weeks and once in awhile to meet deadlines and such.
Chad Miller
May 2, 24 12:11 pm
.
joseffischer
May 2, 24 12:51 pm
Filling in Chad, he basically agreed with you while adding a paragraph to say that it could be more hours and it could be less
Richard Balkins
May 2, 24 4:24 pm
Depending on scope of responsibilities.
proto
May 2, 24 11:05 am
parallel question re: see the "financials" - what would (s)he expect to be given exactly? and what does one look for beyond base solvency [more assets than debts]? if its a sole proprietorship or partnership, how does that intertwine with any personal assets of the current owner (group)?
Chad Miller
May 2, 24 12:13 pm
Record of billing for the past five years the include profits and looses for each year and individual project. Total assists for the firm. Bank statements
for the past five years.
gwharton
May 2, 24 1:27 pm
I agree with all the comments above RE knowing what the specific terms of the deal would be and vetting the financials. Being an equity partner is a lot like being married without the fringe benefits and more stress. Make sure the people you would be partnered with are people you trust and can get along with well. It's not just about the money. It's about fit.
If you decide to say yes, consider being open about the side residential work and using that as equity for your buy-in (bringing your side practice into the company as project revenue, in return for ownership shares). If you want more information about how partnership deals go together, I recommend reaching out to PSMJ. They do a ton of work in firm mergers and equity structures. They might have some good advice.
If you decide to say no, you will not be able to stay there for a lot longer after that. Many years ago, I said no to a partnership offer (because it was not a great deal for me and would have joined me at the hip with a partner I didn't particularly like). I left shortly after that, because saying "no" makes moving forward status quo very difficult.
Chad Miller
May 2, 24 3:17 pm
In my opinion if that happens then you didn't want to be partner at that firm anyways.
bowling_ball
May 2, 24 6:02 pm
I agree, Chad, in principle, but sometimes there's no more room at the top if not becoming a partner of some kind. The firm then loses top talent which can be really, really expensive to replace.
Chad Miller
May 2, 24 6:10 pm
If you're already progressed so far that the only way to increase your responsibility is to become a managing partner then you can't expect to advance any further. That's a rather rare condition to be in.
bowling_ball
May 2, 24 10:04 pm
I went to school with (in some cases behind) and/or worked with every single architect and 1/2 of the interior designers at my office. Keep in mind that I sign their paychecks now, and there's a few that would otherwise deserve partnership in the near future, but my partners and I are just getting started. They can also start to compare our assumed salaries against their own, which has happened to me in a staff review. We cleared that up in the most positive way, and it's never been an issue since. But yeah, some are only moving up so far, and that's for most.
Chad Miller
May 3, 24 9:56 am
There is most certainly a cap to your pay if you're not a managing partner. I was thinking about the OP being 27 years old and being 'capped off' because he/she didn't accept the partnership - that is unreasonable.
mtdew
May 3, 24 4:28 pm
So did you talk to your employer?
btw. is it a sole proprietor and how many employees?
Transitioning to a partner is a process and there are helpful videos on Youtube that explain the basics of legal and financial aspects of buying in.
Hello all,
First time posting on here as I need some advice.
To start with, here is a little bit of a timeline that lead to me being offered ownership at my current firm.
2015-2017 Associates in Architectural Technology
2016-2019 Worked at a small design firm
2019-2021 Worked at my current firm as a designer
2021 Became a licensed architect and started managing and designing my own projects.
2024 Offered an option to buy in.
This all sounds amazing on paper, especially at only 27 years old. However, in 2020, I also started a residential design firm on the side since my employer allowed side residential work. It’s been growing the past 4 years and now has the potential to be my full time gig.
Im not quite ready to start on the residential stuff full time, but need to give the firm an answer tomorrow. How do I say not right now, without burning the bridge, getting let go tomorrow, and still leaving that door open in the future should the residential side not work out or not be what I had hoped?
Sorry for the long winded first post, but I really appreciate any insight.
thanks!
You just need to say "yeah, let's do it"
Then follow up with demands for a timeline that is really generous - 2-3 years. You need to review financials, your lawyer needs to review financials, you need to do a test run, find out how much the buy in is, get the buy-in money together, etc....
I think you have a lot longer than just tomorrow.
That's pretty similar to what I did, though I was older at the time. I was honest that I wasn't sure that ownership was right for me but that I was very willing to consider it. I got a raise and was included in all major business meetings and decisions for a couple of years, which was a great education, before deciding that it wasn't going to work out.
WG, I'm looking at the same thing ATM. Discussions opened up late last year and I expect they will be ongoing for the next fiscal. Window is 5y give or take so it will take time but I have great advisors on my side who've given me plenty of advice and warnings.
I'd say the process in my case was about 3 years of mentorship (of varying quality) leading up to the actual conversation, then 18 months with financials, lawyers, etc. If they actually want a partner and aren't just looking for a cash infusion, they'll understand that you aren't ready just yet and need to do your homework.
Non, that's great--keep us posted! One thing I've learned is that a successful firm will have one principal who is great at sales, one who is great at design, and one who is great at managing a team and getting things done. From things you've said, it seems to me that you're probably the third type of person, but maybe you're good at the other things too. Or are there other principals (or principals-to-be) who are good at them? No worries if you don't want to discuss it here.
WG, I'm sure I'll write something more in depth when the time comes but your assumptions are not wrong. The problem on my hands at the moment is that the main partner responsible for points 1 and 2 is heading out and I don't see any of the other equity members filling that gap. I'm mostly 3 and can 2 if required but there are many unknows.
A few questions:
1. What type of buy in is this?
2. How many shares of the company are you buying?
3. How many total shares of the company are there?
4. If you're a voting partner (managing) how is your vote weighted?
5. Have you see the firms financials?
6. Is there a noncompete? (if in the US may not be allowed)
7. Is there a nondisclosure?
8. What are the procedures if you decide to sell your shares in the company?
It's normal for a firm to give you a couple of months after the initial offer to allow you speak to your lawyer, see the firms books, review your personal finances, ect BEFORE they ask you to buy in.
Yeah if they're expecting a snap answer without having the chance to see the books, get counsel, etc... that's a red flag
/\ This. Also - some old school partners think that if you're a partner you need to work crazy overtime. While your hours a week will increase if you're a managing partner, it shouldn't be a crazy amount. If you were doing 40 hours a week you'll be doing 50 hours a week once you get the hang of your new new responsibilities.
If this is just a profit sharing buy in your hours shouldn't increase at all.
That should be the case especially if you aren't the sole managing partner doing the work and that there are others forming a team. If it was just you then the hours would be longer but 50 hours should be normal and maybe up to ~60 hours a week on some weeks during busy times. Early on, it might take you 60-70 hours a week to do all the stuff as a managing partner but taper down to around 45-60 hours a week as you get a hang of the new responsibilities. An occasional long heavy week will occur. However, it shouldn't be most of the weeks and once in awhile to meet deadlines and such.
.
Filling in Chad, he basically agreed with you while adding a paragraph to say that it could be more hours and it could be less
Depending on scope of responsibilities.
parallel question re: see the "financials" - what would (s)he expect to be given exactly? and what does one look for beyond base solvency [more assets than debts]? if its a sole proprietorship or partnership, how does that intertwine with any personal assets of the current owner (group)?
Record of billing for the past five years the include profits and looses for each year and individual project. Total assists for the firm. Bank statements for the past five years.
I agree with all the comments above RE knowing what the specific terms of the deal would be and vetting the financials. Being an equity partner is a lot like being married without the fringe benefits and more stress. Make sure the people you would be partnered with are people you trust and can get along with well. It's not just about the money. It's about fit.
If you decide to say yes, consider being open about the side residential work and using that as equity for your buy-in (bringing your side practice into the company as project revenue, in return for ownership shares). If you want more information about how partnership deals go together, I recommend reaching out to PSMJ. They do a ton of work in firm mergers and equity structures. They might have some good advice.
If you decide to say no, you will not be able to stay there for a lot longer after that. Many years ago, I said no to a partnership offer (because it was not a great deal for me and would have joined me at the hip with a partner I didn't particularly like). I left shortly after that, because saying "no" makes moving forward status quo very difficult.
In my opinion if that happens then you didn't want to be partner at that firm anyways.
I agree, Chad, in principle, but sometimes there's no more room at the top if not becoming a partner of some kind. The firm then loses top talent which can be really, really expensive to replace.
If you're already progressed so far that the only way to increase your responsibility is to become a managing partner then you can't expect to advance any further. That's a rather rare condition to be in.
I went to school with (in some cases behind) and/or worked with every single architect and 1/2 of the interior designers at my office. Keep in mind that I sign their paychecks now, and there's a few that would otherwise deserve partnership in the near future, but my partners and I are just getting started. They can also start to compare our assumed salaries against their own, which has happened to me in a staff review. We cleared that up in the most positive way, and it's never been an issue since. But yeah, some are only moving up so far, and that's for most.
There is most certainly a cap to your pay if you're not a managing partner. I was thinking about the OP being 27 years old and being 'capped off' because he/she didn't accept the partnership - that is unreasonable.
So did you talk to your employer?
btw. is it a sole proprietor and how many employees?
Transitioning to a partner is a process and there are helpful videos on Youtube that explain the basics of legal and financial aspects of buying in.