Why would an active entrepreneur with no interest in retiring sell their business? A recent article provided a very concise explanation using Brynn Putnam’s startup Mirror as an example:
A big reason Ms. Putnam joined that parade of founders who sold out but stayed on: Mirror can’t become the next Peloton, NordicTrack or StairMaster without deep pockets. Most startups go through what Airbnb Inc. founders call a “trough of despair” before really hitting it big time, and that can last years. In the case of Airbnb, sometimes they go through two.
The heat is rising for Mirror. Copycat products are hitting the market at prices below the $1,500 Mirror. And research and development isn’t getting any cheaper. And global manufacturing and delivery operations require tons of working capital. And it is tough to get footing in retail without the heft of a partner like Lululemon. And…and…and…