

Ask HN: start up and financial transparency - asking_hn

Question to all the cool people at HN, I am at a startup for about a year now, during this year we had a small amount of money coming in every month at about 5k, this is happening for the last 9 months. Recently, there was some talk about the money left on the account which is considerably lower than expected. I asked for a run-through of our expenses but got shutdown. I am one of the co-founders, but do not have access to any of the financial statements. Should I resign?<p>EDIT: during the year, there were absolutely no "financial rundowns" at all.<p>Also, none of the other people involved in the start up do not seem to mind.
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tomfakes
This is a huge red flag. If the other co-founders won't show you this stuff,
then you're not a co-founder in their eyes.

Without the information you need, all you can guess at is that someone is
spending money without wanting to tell you - and this could be construed as
stealing, since some of this money is yours (as an owner of the business).

There may also be tax consequences that you may be on the hook for too!

If you can't get the information from your co-founders, it will be necessary
to get legal advice from a professional (not HN!)

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ColinWright
I'm a director of a limited company (actually two) in the UK. As such I am
legally required to know about the finances of the company, and accounts and
projections for every month are given to me.

In your case it depends entirely on any formal or informal agreements you
have. Without knowing more about it we can't advise. Are you incorporated? How
are you trading?

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asking_hn
I will have to double check on the agreements that I signed, but we are
incorporated, pre-seed startup.

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newman314
As a co-founder, you are a partial owner of the company and am well within
your rights to see the books.

What do you mean when you say that you "got shutdown"? If by this you mean
that your request was denied / not taken seriously, then you should have a
serious conversation with your co-founder(s). It shouldn't be a "need to know"
situation.

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chris_dcosta
If you have a company accountant, book an appointment, like immediately, and
get them to show you the accounts.

Make it a formal request, tell them what your concerns are, and Cc the other
owners. Why? Because, as someone pointed out, these kind of financial
shenanigans can land you in hock. Just making that request brings the issue
into the open, it should cover you legally, and they will know that you won't
stand for being messed about.

Personally, I would not stand for it, and I'd basically tell them to open the
accounts or I'd walk, and I would not think twice about carrying our the
threat.

That being said, if they were genuinely not involving you but are happy to let
you see everything, and be a joint signatory on the bank account, then it is a
simple misunderstanding.

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asking_hn
I wanted to thank everybody for the suggestions, I emailed the rest of the
team and requested to see the finances.

Thanks again :P

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soho33
totally agree with the comments mentioned above. As a co-founder you NEED to
know where the money is going! even if you are the "technical" cofounder and
the other partners take care of the business side of things, you still need
access to make sure nothing fishy is going on.

you don't even have access to the business bank account online? that was the
first things me and my partners did. to make sure we all have access to the
bank account and on quarterly basis review all the income and expenses. BIG
red flag that you need to look into.

