Lessons Learned #2 - Don't Be Greedy

It's usually a mistake to reject an attractive exit opportunity because you believe that "in a couple of years we'll get far more for the business." 

In a couple of years the share market could have collapsed, a new competitor may have launched, the CEO could have died, the price of oil could have doubled . . . risk is real.

If someone offers you 2x after two years . . . take it.  41% IRR and the profit is banked.

Comments

[Andrei Vorobiev]

Simple and logical. Also, very much along the thinking of Super LP Chris Duovos in his last column "A hundred days, a hundred months."

[Not Bill Ferris]

There is a good comment by Bill Ferris about this exact subject in his book, Nothing Ventured, Nothing Gained. He says,

"We have always adopted the approach of leaving something on the table for the next investor and of taking some profits on the way up. We have seen many examples over the years where fortunes have been made or lost, where markets have collapsed more quickly than they rose and where extraneous events have devasted values in spite of blameless and dedicated performance by the management teams."