The Wisdom Wall

“one of the things that I coach founders on when they go through this, um, is I say, hey, you know that you can go back and create a new deal for yourself within the company, right?”

“By the time you're going to have that conversation, it needs to be definitive. Dude, I'm out. I'm out of money. I'm out of, like, hell, like my, my spouse is trying to, you know, is, is tired of dealing with my shit. Um, I need to get out. Okay, now hear me out. Now, need to get out could mean two things. It could mean…”

“You have to start with right now, your option is zero. You can't be like, oh, I know we raised that fifty million, but like, you know, this one will only get you five. You'd be like, dude, you invested however much you invested. Sadly, it's gone. We're starting from zero. This is how you recapture from zero, not here's…”

“no one will remember whether or not you made money on the sale, but everyone will remember that you sold.”

“Usually the founders are like, well, I just raised that a twenty million dollar valuation. And I'm like, yeah, and if you stop working there, the value is now zero. Like, it works there, there's no value. And most founders don't get that.”

“They think that their cost structure, their OPEX, everything else is baked into what it's always been. They forget that that asset in the hands of people that don't have that expense base could be a money machine.”

“If you don't keep that variable component, what I call kind of the lottery ticket in the deal, it is very hard to negotiate a cash purchase.”

“when a startup runs out of cash, everybody kind of runs for the hills. The founders are like in a broken cap table where they have no upside, so like, hey, I'm out of here. The investor is like, well, hey, there's no one to run it, and there's no money, so we're out of here, and all of a sudden, this great asset often…”

“I said, here's three buckets that you're going to wind up in either private equity, which is only an option if you have revenue, right? The second is a strategic buyer, which is always your best case, but there aren't that many in the likelihood that they're willing to buy in the contact you have has the authority or…”

“Bessemer or folks like them would prefer to be able to have their stock just moved over to another entity that would likely do something with it and hopefully have an outcome down the road so they don't have to write it all down”

“You can't just sell the venture story to the world. Like nobody gives a shit. Do you have some revenue? People understand that.”

“in a lot of cases, by the time you get to this point, even if you've only raised a few million dollars, the likelihood that you're going to sell something and, um, get over your, your preference hurdle is usually pretty low”

“by the time you get there, investors knew this a long time ago. I mentioned that company that I did back in the mid-two thousands called Affordit. By the time I was like, guys, you're not going to believe this. We're going to have to shut this down. They were like, dude, we wrote this off like a year ago.”

“And frankly, having met with thousands upon thousands of founders, I have hardly ever met a founder at the end of this that's just like, ah, I just, my feelings were hurt, so I had to leave. By the time I'm talking to folks, or even, you know, before then, they have ruined their lives at so many levels, both…”

“When you go to PE, it has to be a lot because it has to be worth their while. When you go to strategics, it has to be a lot. But if you've got 50 K and MRR, there are a lot of people that could just take over that business.”

“most of these companies don't get bought with just a big check cash on the barrel head.”