Thoughts on the challenges of building a business and when to sell it.

1. An entrepreneurs dilemma

2. Are Entrepreneurs Gamblers?
“You got to know when to hold 'em,
know when to fold 'em,
Know when to walk away
and know when to run.”
“You never count your money
when you're sittin' at the table.
There'll be time enough for countin'
when the dealin’s done.”
Kenny Rogers, The Gambler
Gamblers and Entrepreneurs are calculated risk takers that rely on luck.
Luck is when preparation meets opportunity.
By design, most will lose.

3. Characteristics of an Entrepreneur
 Highly creative, intelligent and driven.
 Flexible and focused, quick to change course.
 Willing to use their own capital.
 Have experienced both success and failure.
 Have domain knowledge of the industry.
 Have an evolutionary versus revolutionary idea.
 Interested in generating a profit and not just creating
“Value”.

4. Types of Entrepreneurs
 Most entrepreneurs are evolutionary opportunists.
We see an inefficiency in our work or in our
interaction with the marketplace and we have the
guts/need/desire to capitalize on it.
 This stems from an innate behavioral desire in humans
to be more efficient, and it has been the driver of
productivity gains since the dawn of civilization.
 It is a rare breed of creative revolutionaries that can
see the future for a product or service that doesn’t yet
exist and have the ability to achieve their vision.

5. What business did you build?
Retail Trade
Wholesale Trade
Skilled Trades
Professional Services
Real Estate
Manufacturing
Technology
Business Services

6. Is It Time to “fold ‘em”?
 What were your original goals?
 Legacy
 Wealth
 Lifestyle
 Who provided the capital?
 Venture / PE
 Friends / Family
 Sweat Equity / Personal Funds
 How dependent is the business on you?
 Management style
 Corporate structure
 Business Development / Sales
• Where is the business cycle?
 Monetary policy
 Market valuations
 Trends and bubbles
• Are you adequately financed?
 Track record of increasing profit
 Decent returns on equity/assets
 Strong balance sheet
 What are your expectations?
 Payout and walk away
 Earn-out and continue working
 Get out at any price
Are you selling from a position of strength or weakness
Why is your business a compelling investment
Is it a strategic or financial transaction

7. Don’t Miss the Tide
“There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.”
Shakespeare, from Julius Caesar
Translation: Timing is Everything!