In reality it is an option, but given the artificially constrained "world" we're dealing with in this article, it made sense to skip that to make a point. Also, depending on what you are trying to accomplish, it might not make sense, depending on your liquidity needs. It's one thing to own a big chunk of a company which is actually very valuable, but quite another when you do not have access to that money in order to actually, ya know, do stuff.
It's one thing to own a big chunk of a company which is actually very valuable, but quite another when you do not have access to that money in order to actually, ya know, do stuff
Further illustration of exactly the sort of strange mindset I'm talking about. This mindset where a business does not exist to make a profit, oh no, but to be sold to others for a profit.
The origin of business is to turn profits for the invested via the operations of the business. It gets more complicated in large corporations, but if I start a strawberry jelly business and make & sell strawberry jelly, I directly profit on the operations of that business. Because that is what businesses are for!
Now I suppose if you start a business that is unprofitable and will never be profitable, then you better take whatever buyout you can get and run, making sure to leave someone else holding the bag. But hopefully that is not the businesses you folks are trying to start, else this is just the set for another remake of "The Producers".
Absolutely, and I didn't say anything to contradict that. But there are limits to the availability of the value you have created with your business. Outside of paying yourself a salary equal to the entire profit of the company (or more, for a limited period of time), what do you do if you need a chunk of cash for some specific purpose at a point-in-time? The most obvious, straightforward and common means is to sell equity in the company to others, up to or including selling the entire company.
I, for one, am not advocating the idea of "build to flip" as a generally good thing. But still... the goals of the founders have to be kept in mind, and if selling the company is the best path for them to accomplish their goals, who are we to tell them otherwise?
