The following is an excerpt from a Value Builder System publication. The Osborne Group Principal Michael Dick is a Certified Value Builder.
How do you know the right time to sell your company? One answer is when someone else is willing to invest more in your business than you are.
When you start a business, nobody is willing to invest in its success more than you. You’ve already worked a 40-hour week by Wednesday and, if you’re like most founders, you’ve invested a big chunk of your liquid assets to get the business going.
You’re all in.
As your business grows and becomes more valuable, you may find yourself becoming more conservative, unwilling to risk the equity you have created inside your business on your next big idea. You have reached a point where someone else may be willing to risk more time and money for your business than you are.
Peach New Media
David Will founded Peach New Media, a web conferencing reseller back in 2000. In the early days, Will changed his business strategy frequently, trying to find an idea with legs. After a number of pivots, he landed on selling learning management software to associations.
The business grew nicely and by 2015 Peach New Media had 40 employees and received an attractive acquisition offer from a large private equity company. Will was conflicted. He loved his business and treasured the team he had built. At the same time, the acquirer was offering him a life-changing check.
In the end, Will realized that he had become somewhat more conservative as his business had grown and the potential purchaser was willing to make a big bet on integrating Peach New Media into another of its acquisitions. Will realized he had reached a point where his appetite for risk in his own business was lower than his potential acquirers. Will decided to sell.
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