By Stefania Aulicino
“I want to get my company to $10 million in revenue so I can get the attention of buyers and sell it”;
“I want to get to $1 million in EBITDA so I can attract a larger universe of buyers.”
Why would you do all the hard work of building a company to get it to a critical stage of take off and give all that upside away?
If you don’t grow your company, WHO WILL?
Too many entrepreneurs operate from the perspective that you can only monetize value if you sell your company.
The alternative is to operate from the perspective that you create new value daily and can monetize that value at will.
You can have your cake and eat it too.
That’s economic self-sufficiency.
Mike was driven to serve patients who are prescribed a powerful blood thinner, Coumadin.
Powerful and dangerous—too much-you bleed to death, too little you clot. Without it, you die. The solution is frequent blood tests, sometimes even daily.
Most patients must go to the doctor’s office and wait. This is very disruptive to a busy life, especially for a mother with one child who has to be tested and 3 others in tow, or an executive who travels, or a laborer who does not get paid when they are off the job.
Mike’s solution is a device to let the patient test their blood themselves at home with a finger prick. The device then sends the results by phone to nurses on Mike’s staff who evaluate the results and forward them to the patients personal MD for any change in dosage.
Mike’s market was growing fast.
Faster than the bank would finance.
Faster than his internally generated cash would support.
Mike’s company was generating revenue of $10 million, with an EBIT approaching $1million.
Mike figured this was the time to sell.
That’s what a lot of entrepreneurs believe: they have done their job to get the company going.
• Perhaps it’s the fatigue of looking for cash to grow
• Perhaps it’s the risk of all your eggs in one basket which makes it hard to take that next entrepreneurial decision at $10 million vs when you were only $2 million
• Perhaps it’s the fear of a concentrated personal net worth which means your family has no safety net
Mike got the opportunity to test this theory when I suggested he could have his cake and eat it too. He was willing to explore the possibilities.
We embarked on a process to get him capital to grow plus some personal liquidity.
I helped Mike optimize his valuation so he could monetize it without selling his company.
I introduced Mike to deep-pocket venture capitalists who offered Mike the $6 million he wanted for growth funding, plus $1 million of liquidity for his original Angel investor, plus $1 million of personal liquidity for Mike, all for 33% of his company.
Mike got to the alter but decided not to marry.
• Maybe it was the fear of the unknown- a venture capital partner
• maybe it was heightened visibility in the competitive world with well funded companies coming into his space
• Maybe it was the fear of holding himself accountable to a bigger future, which he wanted, but was not sure he could actually achieve
These deep-pocket VCs believed in Mike and his mission: the VC’s modified their proposal 3 times to address Mike’s verbalized concerns. Mike turned them down.
Mike sold his business to a public company that wanted to enter his space.
They told Mike he would be the CEO of a new division, with unlimited funding, and a big salary.
Instead, they fired Mike within 6 months.
Mike’s PASSION to address the pain of patients taking Coumadin is not being realized.
It did not have to be that way.
You can have your cake and eat it too.
Perhaps you can learn from the expensive lesson Mike got.
Monetizing value is an everyday process.
Only you can control your destiny.
And, for a Business Builder, your company is your vehicle to do that.
Exercise your entrepreneurial genius to monetize your value daily and enjoy the ride.
YOU need to be at the helm of your company to guarantee your mission will be realized.
Your customers really need you to grow your company.
Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Become a magnet for non equity and equity sources to fuel your growth. Explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com
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