

Ask HN: How do you know when to walk away? - just_want_out

Throw away account<p>The company:<p>Pros: 8 years old.  $8m revenue, $1.5m earnings.  Solid fundamentals.  Decent barrier to entry, so not many competitors.  High customer switching costs, so our customer base is stable.<p>Cons: High human touch (think professional services), so very unlikely to see software style "hockey stick" growth.  In a highly regulated industry, so lots of bureaucracy hindering everything.  Financials are plateuing due to complexity of scaling.<p>My deal:  Founders want out, so I was brought in two years ago to operate, "professionalize" and prepare for sale.  I get 15% of profits.  In the event of sale, I get 15% of proceeds (somewhere between 500k-1m).  If I walk, I get nothing.<p>We've been sitting in deal stagnation for about 18 months.  Niche industry, so not many buyers (we know all of them and have shopped to all of them).  Highly regulated, so everything is over-scrutinzed.<p>We've tried throwing money at the problem (lowering valuation, hiring bankers/lawyers to assist), but nothing seems to "unstick" us.<p>Founders are all-or-nothing kind of guys.  I've floated the idea of dialing down to part time, but they're not interested.<p>I'm not sure how much longer to stay.  I just want to move on with my life.  How stupid would it be to walk?  Would I regret it?  Will I regret staying?  Will it be a black mark on my career if I don't get this thing sold?  Will it be a black mark on my career if I stick with it for too long?<p>Any help/advice would be appreciated.  Thanks.
======
sosuke
There are enough details in there that if the founders were to read the post
they would most likely see themselves.

If you aren't seeing an end then don't expect it to come to you by waiting.
I'd say move on and find another opportunity. I'm sure you have the resume to
land another position and at the very least anything new you move into would
be exciting for it's newness. You might regret it if they sell for $X in the
future but you can only make decisions based on what you know now and what you
think is best for you.

At first I thought you were the company owner to which I would have suggested
to do exactly what they did which is to higher someone else to manage the
company and incentivise them on a sale. All the pressure it sell is on you now
and if you don't think it will happen you might want to move on.

------
RobGR
Move on as nicely as possible to everyone, including yourself, but move on. If
you don't have ideas and plans on what will make the sale happen, don't sit
around waiting for lighting to strike.

Tell the founders your thoughts. Tell them that you will stick around for 2
months to interview and train your successor, or that you can just walk away
if they want to go "clean" for a replacement, and indicate that if you are
presented with the replacement to train you'll leave early. Spin it along the
lines of "This situation is not one that I am improving, so I need to find a
different position somewhere, where I bring a lot more value; this is in your
interest and mine. We both need to be doing something different, because the
current track isn't giving us our sale, so if isn't going to happen with me
hopefully it will happen with a new person."

It's possible you might regret it later, but that's true of all big decisions.
If they are sold soon after you leave, it's not necessarily that you missed
something, it may be that your leaving catalyzed things and lit a fire under
the appropriate asses, either buyers or sellers, and that it wasn't something
that would have happened if you had stayed.

It's impossible to say what will happen to your reputation or etc; but after
all, just coasting for a couple of years doesn't necessarily look good either.

I say all this mainly because it sounds like you want to leave anyway. Many
people would regard 15% of 1.5 million in a stable company a very good
position, and would stay and accumulate savings.

You don't mention what opportunities you have elsewhere.

------
Travis
Flip a coin. While it is in the air, think about which side you want to land
up. That's what you really want to do.

Seriously, though, your question is really only something that you can
evaluate. If I were you, I would evaluate the probability of it getting sold
in the next N months (where N is your limit before burnout/explosion). Then go
to the founders and voice your concerns.

The founders obviously want you on board (potentially, they might need you).
Explain to them that you're looking to exit, and discuss possible terms with
them. Let them know that you're not particularly confident with the direction
of the sale, and would like some quantitative numbers and timelines for the
sale or sales goals. Negotiate, with them, terms of your departure. This way,
you don't leave them in the lurch during a crucial time; in exchange,
negotiate an exit route that still gets you some compensation (maybe if you
leave in 6 months, company unsold, you still a smaller cut of the sale).

I doubt they want you leaving during a sale; they brought you in for that
purpose. Discuss your concerns, determine a plan, a timeline, and metrics to
evaluate success/failure. In exchange for your continued efforts, make sure
you have an exit plan that advantages you as well as is considerate to them.

------
learner4life
I do not think the bankers you hired are doing a good job. There is a lot of
money sitting in private equity which will love to have this company at the
correct price.

------
qq66
There must be some price at which you can sell a company making $1.5m of
profit.

------
NonEUCitizen
Have you talked to an investment bank?

------
Mz
My approach to issues of this sort:

Pick a time frame for _not deciding_ , usually less than six months. Decide
that at X time (and/or in the event of X), you will make your decision. Make
this a firm commitment that you will make your decision at that time.

During that time, mull over which details are the "make or break". For me, if
I leave a situation, the "make or break" frequently hinges on the
person/people in charge and my judgment of the direction they are taking. So,
to me, this is probably the single most important thing you have said:

"Founders are all-or-nothing kind of guys. I've floated the idea of dialing
down to part time, but they're not interested."

Maybe not a deal killer, but certainly a red flag. Most details in life are a
case of "it has it's good points and it has its bad points". But if the folks
in charge are The Problem, the odds of fixing it are slim to none (with strong
leanings towards "none").

Good luck, whatever you end up doing.

