When To Cut & run
When & if you should quit or continue...
Working with a company that is hurting, as a business, for the past six month (see my previous posts). They have about $1.3M in revenue and have about $3M in debt.
The two owners (who own 60% of the company), discussed the reality of going bankrupt - but, they both spent seven years building the company to where it is today and did not want to take the "easy way out".
We discussed doing an asset sale, which, on paper, is valued at about $5.2M - with assets being two items, IP and inventory. This is seriously being considered and currently some investors are being pursued to purchase their assets.
But, sadly, even if the assets are sold for $3M, the $3M debt is still sitting on the companies shoulders. Through lawsuits and bad contracts signed by the partners, they are either personally liable or the company (the shell remaining) will have to take the burden. Back to bankruptcy - which, sadly, the partners think that they can "resurrect" the company and get rid of the debt and continue to grow the company.
So, back to the title of this post. I have decided to leave them. Six months ago, lawyers and consultants (with much more experience then I) came in and advised the company on what to do to get out of their current situation and put the company back on track.
All the advice was ignored or, more importantly, listened to, but, a decision on that advice delayed until the company was not in a position to act on the information and advice.
In a past posting, I talked about how, if you delay on making a decision, the opportunity that was presented may be lost - and that in most cases, if you wait until 100% of the information is known, the opportunities presented will most likely not be there anymore.
Because this company delayed, they enabled themselves to be put in an even worse place then they were previously (a creditor is now in a prime position to take over the company), the partners keep making decisions that causes them to lose more and more control of the company (even though you own 50%+ of a company doesn't mean that you control the company if you continue to turn over that control through contracts and poor decisions).
So, I can't work with them anymore as they continue to lose control, continue to make decisions that allow a creditor to take over all of their financials (thus control), direct contact with not only their sales force but their customers, and complete inventory control. Meaning, the owners have done an asset sale without receiving ANYTHING in return.
Watching the poor decision making and a company being gutted because of sheer desperation (or stupidity), has forced me to run away and keep my reputation, as well as my efforts, intact and respected by a future company that will hire me.