Choices (it’s all about risk)

terra cotta warriorsThis company had struggled for years to reach profitability when I received the call to talk to the founder about his choices in the marketplace.

Why not consider a back up plan in case the funding source you are counting on does not materialize? After all, being a partner in your project is better than failure, which often has personal repercussions beyond the business losses.

The CEO was certain that the next round of funding was just around the corner and he wanted nothing to do with the alternative I had suggested.

My suggestion? A Strategic partner would help gain market share and / or build a more efficient manufacturing capability and allow him to concentrate on what he did best (and quit spending most of his time raising money). I followed up diligently to no avail.

The banker that had referred him to me a year ago, called last week to tell me the firm was being liquidated.

Another great technology, great product, and good business model imploding because the founder would not take the finance blinders off to look at other approaches to survival.

It hurts me to see the lost money, energy, jobs, technology, and all the years of creativity and building that went into this firm.

Perhaps my approach is too soft.

I tell people that if they “just wait to say no” and look at alternatives in case their own plan doesn’t work. Then there will be a choice available as a resort to failure.

This does not work in most cases. I get more liquidation calls than I care to take.

Your stories and suggestions for improving my approach would be appreciated.


2 thoughts on “Choices (it’s all about risk)

Add yours

  1. Dear MikeT:

    Excellent posting. In 24 years of being an intermediary, I have always recommended a strategic partner as a solution.

    The over weighted number of investment bankers that only recommend financial solutions is overwhelming in the United States. This community is selling their clients short.

    There are many successful case studies in my completed deals file, I would love to hear from others on their experiences. Thank-you.

    Mark Borkowski, pres.
    Mercantile Mergers & Acquisitions Corp

  2. Mike, the difference may be that some entrepreneurs care mostly about themselves and not the business or the product they have. That may be why they refuse partners etc that would help the business. But it they really don’t believe that much in what they are doing maybe it isn’t what people think it is anyway. Your question is appropriate, how many good products and ideas are lost to self centered behavior?

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