Figuring out if and when you should sell your company is a really tough decision. It's even harder when you've worked so hard for so long.
In today's short video, I'll walk through how to decide if and when you should sell your company.
Read The Transcript For The Video Below:
When we started getting traction in the marketplace, we started getting calls from investment bankers wanting to meet with us. And it was interesting. The calls and the meetings I always took the meetings, because I was always interested in what was going on and don't want it to build the relationships for the long term.
But the meetings were always the same, you know, you could always hear the, "well, we started to hear you started here, your company more and more on the radar screen" and then you would talk and essentially I would give a pitch about what was going on with the company. You're always pitching by the way, when you're the CEO always, and explain kind of what was happening.
And they'd ask, "Are you're thinking of selling?" And I would say, "No, not even close. Why would I? I'm having too much fun."
And you should never just go out and think, OK, I'm going to go sell the company. Eventually you're going to get to the point where companies are going to be next and there are going to inquire, are you available? Are you ready to sell? And when we started getting those calls, I would always listen because it never hurts to listen. It doesn't cost you a nickel.
It's good to have the relationship with somebody. It's smart to do that. But should you sell or not sell? There's no reason. There's no reason to sell too early.
And how do you keep yourself from selling too early? It's pretty simple. You focus on the execution of your company.
You don't worry about having to sell out so quickly or whatever. There's just no reason why you don't need to.
Now if you have a business where there is a clear inflection point where you're going to need more capital and that capital is going to be significant and the dilution is going to be significant and the risk is going to go up.
That might be the right time to think about selling your business because that's the point where the risk versus the reward is going to switch.
So from a purely financial perspective, that would be the right point. Now, remember this, there are a couple different things here.
You can be the CEO that always wants to be the CEO and not recognize that you know what this is the better decision to make is to sell now because you know what, that's a great deal. I can be financially set and I can move on to something else.
And the Silicon Valley where I live is littered with stories of CEOs that didn't sell and were worth millions on paper and never made a nickel. There. Tons of people out there like that, and obviously you don't want to be that person.
Conversely, if everything's going well and you're enjoying yourself, you need to understand that once you sell the company, it's over.
Yes, you're to make a lot of money. Yes, there's this great financial return coming to you. But the joy of running the company and the thrill of building the team, the camaraderie that you have with you and your team, that goes forever.
It'll all be gone. It'll never come back unless you decide to start another company. I think that's something that's very hard for entrepreneurs to recognize and realize that it's hard enough to get to the mountain top of once. To get there twice is really difficult. There are very few people that do it.
So just think that through when you're making your decisions of when to sell and when not to sell because it's a tough decision to make. You need to understand most importantly, the risk reward ratio of what's going on versus versus the time that you're in the business because if the risk reward ratio is changing and it's looking like you know what the risks are going up, then maybe it's a good time to sell.
This is Brett at brettjfox.com Have a great, great day. Thank you.
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