Our head of sales has hit their ceiling and can no longer scale with our growth, but they are a co-owner with a small minority stake in the business. How do we transition a non-performing minority partner out of their leadership seat without causing a massive corporate or legal rupture?

Question

Tyler Smith · Accepted Answer

This is a tough spot that many owners face. You must separate their role as an owner from their seat on the Accountability Chart. Equity ownership does not grant anyone a lifetime pass to a leadership seat they do not GWC.

Start by having a direct, private conversation. Remind them of the company vision on the V/TO and the growth required to maximize the value of their equity. Be clear that the sales seat now requires capabilities they do not currently possess. Frame the transition as a business decision that protects their investment. If the company does not scale, their minority shares are worth far less.

Offer them a soft landing. This could mean transitioning them to a senior individual contributor role, an advisory board seat, or a clean buyout of their equity. Be prepared to bring in an objective valuation expert to determine a fair price for their shares if they prefer to exit entirely.

The key is to maintain a professional, unsentimental tone. Do not let personal feelings or past contributions cloud the objective reality of what the seat requires. By focusing on what is best for the business and the value of their equity, you can resolve the capability gap without destroying the relationship or triggering a legal battle.