I Gave My Business Away. Here Are 3 Reasons Why. Would you simply give your business away instead of selling it for a profit?
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The company I founded is no longer mine. I didn't sell it nor did it go out of business.
I decided to simply give it away.
As of today, I'm parting with 95 percent equity, more than $16,000 cash in the bank, and all the assets of my international communications agency Global Tolerance. I'm doing this all through a new exit strategy I call the Open Leadership Exercise (OLE), which involves the entrepreneur retaining 5 percent equity, and a voluntary advisory position to help guide the transition.
The process attracted hundreds of applicants from 30 countries, and huge interest from the business world. After a rigorous selection process, I'm happy to announce that I'm giving the company to Noa Gafni, digital strategist from the World Economic Forum, and Rosie Warin, an award winning PR director from a UK agency.
But why did I give it away in the first place? Why not sell? There are three key reasons.
1. Traditional exit strategies are broken.
Up to 75 percent of mergers and acquisitions fail. For any entrepreneur, putting your life's work in the hands of a strategy that succeeds only one in four times is flawed. For those that do succeed in financial terms, the people, vision and values of those companies that are swallowed up, are usually spewed up on the sidewalk. The bank balances might bulge, but at what expense?
Traditional exits tend to involve a trade-off between the entrepreneur and the company they leave -- in order for one to gain, the other loses out. Innovation is needed.
2. Values have value.
It's amazing to me how many companies express certain values, but when it comes to exit, those values are left at the door. In a world of discerning customers, this is a disaster for brand and customer loyalty -- and the long-term value of the company.
Companies that are consistent with what they say and what they do will still be the ones standing in the long term. For entrepreneurs who believe in their company's mission, seeing those values live on is worth more than any amount of cash. Because we're dealing in a different currency.
Why do we become entrepreneurs in the first place? And why do we exit? Sure, we'd like to make money, but too many people confuse money as the ends rather than the means. For the most part, we want to be happy. To make a difference. To live a life of meaning. Science tells us that giving to others is a crucial habit of the happiest people.
Through Global Tolerance, I've been able to work with people like the Dalai Lama and Desmond Tutu. I've had a great ride, but it's time to pass on the baton. As Winston Churchill said "We make a living by what we get, but we make a life by what we give."
I appreciate this won't be for everyone. Some people's only exit aim is to maximize their financial returns. Good luck to them. But the OLE is a way for mission-driven entrepreneurs to retain a financial and intellectual stake in the companies they care for, and leave with their heads held high. To move beyond the current broken exit options and honor the values and vision that point to the very reason why we became entrepreneurs in the first place. To be happy. To make a life and not just a living.
So, I will now be a stay-at-home dad, looking after my babies, in the knowledge that my "other baby," Global Tolerance, is in very safe hands.
Giving away the company has been one of the most enriching experiences of my life. The question is: would you try it?