What is a shotgun clause in a partnership agreement?

Good question.

A shotgun clause also called a buy-sell agreement is an agreement that the owners of a company sign where they can at any time make an offer to purchase the ownership of a member that wants to leave or they can buy the ownership of a member that they want to own. These agreements are far more useful than agreements that use an appraisal to determine the value of an asset. First, if you have an agreement that involves an appraisal the owners will always argue about it being too high or too low. The buyer will say that it is too high and the seller will say the appraisal is too low.

But with a buy-sell agreement this problem is solved. An owner can go to another owner and say “I want to either buy you out for 500,000 or you buy me out for 500,000”. If the person makes a low offer where they offered 500,000 but the asset is really worth 2,000,000 then the other partner can organize the money and say, I think I will just pay you 500,000 and you can sell your part to me. Much cleaner and easier than some appraisal. Appraisals are the worst way to deal with things from the perspective of any company buyout provisions.

If you would like to learn more about buy-sell provisions, ust go to www.benjaminzmiller.com and fill out the contact form and let my office know you want information on buy-sell provisions.

You also can send an email to [email protected] if you are looking for help with a buyout deal. I am always looking at deals and if you have something that is off market and not where it has been sent to other investors, then I am more than willing to take a look at it.

I don't get involved with deals where someone takes a deal and sends it out to 5 or 10 or 100 other investors. I just don’t like working that way since it often is a waste of time for everyone. I propose sending your deal to me first and give my office or me 24 hours to answer you.

If you want to bring deals to me and have me take them seriously, then email them to [email protected] In less than 24 hours in most cases I can give you an answer.

I don’t restrict myself and will look at real estate deals, note deals, business deals including acquisitions and any other type of deal. Just email my office at [email protected] and then we will get back soon with an answer if we want to buy it or invest.

If you would like to meet more investors and lenders, you also can go to the free Sunday weekly meeting held on Zoom for Benjamin Z Miller’s Investor Networking Group.

https://www.meetup.com/benjamin-z-millers-investor-networking-group/

I hope that helps and good luck with your investing!

Benjamin Z Miller
www.benjaminzmiller.com
1-817-203-4160
[email protected]

https://www.linkedin.com/in/benmillersells/
https://twitter.com/BenjaminZMiller