Robert Eberhart has worked hard to break into this Japanese market and build a wine importing business. He figured out how to partner with California winemakers, built a business that has become a target to local players (so he knows he’s doing well).
Now that he can’t keep up with the POS software, he doesn’t have that as a competitive advantage for reducing inventory costs. Additionally, to keep up with the orders from big fish like Costco, he needs more capital. In order to grow the business, he needs a cash infusion, but he’s right to be wary of these investors. I recently read a Bloomberg Opinion column about and IPO underwriter who was fooled by a forestry company that actually did not own the forests they claimed to own because they did not do enough due diligence to make sure they weren’t being lied to. Eberhart needs to make sure he doesn't end up in the same position, especially since the investors came to him, and San Sonoma did not seek them out. He should sell, but he should wait for the motorized certificate that proves who they are. Given the lack of public records, it’s a must given the dirty tactics his competitors have tried in the past.
Early in the case, he wonders if he can take advantage of the regulatory changes in Japan to grow businesses other industries. I think it'll be tough for him to do that - with the growing Japanese economy, he no longer has the advantage of getting in early when these changes were new. He also doesn't have the same appetite for spending most of his time in Japan to establish any new lines of business. He should be proud of the venture that he built, but perhaps it's time to go back to CA for the foreseeable future, and he can perhaps try again once his kids are older.
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