I sent this note to all the CEOs we’ve partnered with at Frontier Angels. Hope you find it helpful…
By: Pat LaPointe, Frontier Angels
I hope you and your families and friends are healthy and staying safe. There is no “sale” worth jeopardizing your health. No meeting is worth exposing yourself or your team to something for which there is presently no cure. Please be careful.
I was running early stage companies in both Sept 2001 and in March of 2008. This feels EXACTLY like those situations. Fear and uncertainty reign. No one person has a completely accurate view of the situation because it is SO complex and unprecedented. In case you care, here are a few observations on how I would apply my own experience if I were running an early stage company today:
Bottom line: act fast to preserve cash so you have more options 6 or 12 months from now. Expect the situation to get far worse than you may initially think (e.g. 20% unemployment; 8-12 weeks of “social distancing”; a big viral rebound in the fall of this year; fundraising rounds taking 12-18 months). If it’s any better than that, you’ll be ahead of the game.
I will never forget how my first big exit completely fell apart in the fall of 2001 and took many months to put back together (at a lower price). Or how I had bankruptcy papers on my desk in 2008. Or the incredible pressure of having to keep my family afloat and protect my staff – many of whom had become close friends and all of whom had families of their own. In both situations, I acted too slowly, was overly optimistic about how soon things would turn around, and pushed the company too close to the edge. I was too optimistic and overly confident of my own ability to impact a market being buffeted by forces far larger than I could overcome – no matter how hard or smart I worked.
But we adapted, learned, and thrived. You can too.
Stay well; act fast. Remember, YOU are the core of your asset. Take care of YOU.
Davis Business Appraisers, a Hampton Roads Mergers & Acquisition firm performs brokerage, business valuations, ownership consulting and machinery & equipment appraisals. We help define the tangible and intangible asset values for family-owned and closely-held businesses, professional practices, limited liability companies, corporations and partnerships.
Our unique combination of business valuation, acquisition, ownership experience and machinery & equipment appraisal expertise allows us to offer innovative solutions to difficult valuation and acquisition issues.