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by mcenedella 1178 days ago
Based on your description I did a search on public companies with roughly the same characteristics on Finviz and returned these 9:

FTCI SRT RBT ZEPP VIAO FEIM EMKR FKWL AAOI

The challenge is that you’ve invested $250M to produce a business that sounds like it’s worth $100+M today (if $30M in debt is going to wipe out half your equity).

As much as the ride has been thrilling and you’ve worked your tail off, from a performance perspective, investors look at the $250M in and $100ish M in current value and say “meh, not that great an entrepreneur, turns every buck I give them into fifty cents.”

The reason your COO and Board are skeptical of your plan is that your actual business that you have has proven to be low margin, which means you produce relatively low value over your cost of goods for your customers. So a fantastical plan where in the future you’ll provide LOTS of value to your customers seems speculative at best, foolhardy at worst.

From a personal perspective, your value as an entrepreneur / founder, will never again go up at your current company, only down. There is no scenario in which five years from now people are more impressed with what you’ve built than they are today.

Your personal best outcome, IMHO, is to sell as much as you can and take the personal exit. Hand the keys over to the COO for them to do the grinding turnaround over next five years. Take six months to recharge and come back into the market with something new. You’ll be able to raise at a higher valuation for a new business, and actually get paid a higher comp.

2 comments

Interestingly, the Board wants to continue the same play of slowly trying to turn the corner on a low gross margin business, versus a more drastic change to go after a new revenue/margin mix altogether. But regardless, I appreciate your candid feedback.
I don't think this is a public company ...
no, but it's good to compare with similar firms and see what numbers they are reporting!
Any investor or anyone close to the numbers of OPs company who may see this post could likely figure out who they are those if they are even close to accurate numbers shared.