Financing the Family Business:
When Growth and Succession are at Issue

Family Business Quarterly
by Thomas M. O’Reilly

The following is a true story. The names and certain details, however, have been changed to ensure confidentiality.

In 1957, Stanley decided to go into business. With $10,000 of his own and another $10,000 from his brother Fred, he started a small parts supply company.

By 1994, Stanley’s company had become a thriving $33 million business with 15% annual growth. Fred, who still owned 50%, was not seriously active within it. He used the company as a place to launch various less-than-successful enterprises. He relied on the 50% split of company profits that Stanley had always given him to live on and to fuel his various undertakings. More…