We're at a crossroads and our board members are sending us in different directions. How do we determine the right path forward?
Maynard Webb
Founder, Webb Investment Network; Author ‘Dear Founder’; Board member Visa and Salesforce.
We’re at an inflection point on our business. Growth is good, but we’re not at a breakout stage. The board is mixed on what we should do: One director offered money on onerous terms, another wants us to cut to get to profitability, and another wants to see if we can sell. Which path should we pursue?
-CEO with hundreds of employees and customers
Dear CEO,
It sounds as if you have engaged directors. Thank you for sharing their points of view. Remember that you and your venture investors are in this for different reasons. You’re all looking to build something, but they’re looking for outsized returns. You’re trying to figure out the best plan for the next five years, not the most lucrative plan for next week. The important questions here are:
What do you want to do? What’s the best outcome for all?
To answer this, let’s dig deeper. I am asking you to look with eyes wide open (not with rose-colored glasses).
领英推荐
Let’s explore at the choices you’ve been presented with:
1.???? You could take money, even on onerous terms. But why limit yourself to this one investor or someone already on the board? You could try to raise money on more favorable terms from someone else. Yes, terms are different than they were in 2021, and not always as founder friendly, but companies can raise in this environment, and you should always try to get the best terms possible.
2.???? There’s merit to a plan that involves making necessary cuts to get to profitability, but you also need a strategic plan to create a more a valuable company. Growth is what drives valuation and what you really need to focus on. Are you ready to do something transformational?
3.???? You could sell, but that’s not likely if you don’t have anyone interested in buying you. If you’re not being romanced this is probably not an immediately optimal solution.
What about some options you didn’t mention? What other moves can you make to grow? Could you buy an entity that will accelerate your vision—a company with adjacent capabilities that would allow you to acquire new markets?
Ultimately, it’s not really about raising money, cutting costs, or selling out. It’s about capturing opportunity. That’s what will align—and energize—you, your board, and your team.
Every week I respond to a new question. Ask me your question in the comments section.
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7mo vocal partido bloquista
6 个月Great advice!
Building Companies from Idea to Empire through Technology ?? Founding CTO of Intercontinental Exchange ($70Bn market cap) ?? Hired and lead team of 400+ engineers
6 个月I don't think there is enough information in this brief post to answer this question with an accurate answer. Its very likely however, that you have to do all these things - lower costs to some degree, seek additional funding on acceptable terms to continue growth, AND consider selling if there are any potential interested buyers.
B2B CEO Coach | 4x CEO | Strategic Planner | Mastermind Facilitator | Leadership Expert | Team Builder | Performance Optimizer | Problem Solver | Entrepreneur | Founder | Thought Leader
6 个月Tough spot, huh? Bottom line: think long-term and go for growth opportunities that match your vision. Keep your options open and stay focused on what moves your company forward!
Leadership is more than just giving orders.
6 个月Interesting that you have so many mixed views on how to progress with the business from the board. Usually when someone wants to cut cost that means lay off employees. The problem with that is it sends a signal that something is wrong with the business plan. Taking capital from one group to help the company yet putting more financial stress doesn't seem to be a wise move The last one that wants to sell the company, just wants to get out of the business. That is the director who needs to decide if being a part of the board or company is part of their future. When you have this many different conflicts or personalities within a group, I'm not surprised that you asked for help. Maynard Webb has given you sound advice to think about. The future of the business isn't just the board members but the employees that worked hard to make the business grow. Before you make major cuts in personal, look for other ways to restructure your expenses. Even the smallest adjustment can make your business more profitable in the future.