WineInStyle: Nearly Ten Years Later - It's Time to Sell

Eberhart should sell. Not only is the business itself in precarious financial condition with a lack of working capital, he would also get a reasonable payout. And perhaps most importantly, Eberhart's personal motivation seems to be waning and has a desire to spend more time in America with his family.

• Little cash on hand: it seems like a lot of us int he class are in agreement that without the necessary working capital to finance large orders like the Costco order, WineInStyle is in the unenviable position of taking out credit just to finance purchase orders. Further rounds of venture funding may also be difficult to raise at increasing valuations if the company, almost ten years into its existence, hasn't yet proved profitability.
• How much would he get? In 2005, the last round of investors invested $2M for a post-money valuation of $10M. The only information we have in the case about Eberhart's likely equity stake is that he put in an initial $135k out of the initial funding of $250k. Let's assume generously that he may have up to 40% of the equity since he does not have a co-founder and invested heavily himself at the outset. 
• Assuming the new group of investors is buying a controlling stake at the prior year's valuation of $10M, they might be giving the company a cash infusion of 60%*10M = $6M. Eberhart would then be entitled to $2.4M - which roughly translates to $267k per year over the 9 years he worked on WineInStyle full time. 
• Personal motivation: Eberhart gave it a great run, but his heart isn't in it anymore. Having a family photo drawn without you in it is brutal!