Acq 2: Introduction

“Whenever you see a successful business, someone once made a courageous decision.”

– Peter F. Drucker, Management Consultant and Author

Should you sell your business, or should you double down? Or should you explore other alternatives? If you sell now, you may be leaving money on the table. But if you maintain the status quo, your competition will eat you for lunch. At the same time, if you double down, a large payout glimmers in the distance. 

You may be at a point in your life when you prefer to diversify your wealth instead of concentrating it. You may feel it’s risky if too much of your net worth is concentrated in one illiquid source – your business. If a competitor puts you out of business, you could lose the majority of your net worth.

Or, you may want to double down, but you don’t have the capital to invest in your business. The problem is, if you’re in a competitive industry, you must put cash back into your company to stay in the game. Instead of taking money out, you need to put money back in, which is perhaps the exact opposite of what you want to do at this stage in your life.

As a result, you face a critical decision. Do you sell now and get out while you can, or double down and risk losing a substantial portion of your net worth?

It’s a decision that will determine the fate of the rest of your life. Unfortunately, these critical life decisions are often made as a response to an acute event. Or they may be made in a frame of mind that’s sometimes fleeting. As Marcel Proust, a 19th-century French novelist said, “All our final decisions are made in a state of mind that is not going to last.” As a successful entrepreneur, you’ve learned to temper your optimism with realism. But what should prevail now – your optimism or realism?

In this chapter, I offer a framework for helping you decide whether you should sell your business or double down. If you decide to recommit, I’ll provide several potential options for raising capital other than traditional bank financing.