Sunday, March 17, 2019

WineInStyle - Sell Sell Sell

Eberhart is faced with a tough decision, but to me the decision seems simple. For a moment, let's forget that we are at business school and that the question from the case should be addressed from a business standpoint, then the conversation becomes easy. I think Eberhart should sell the business, after first vetting the investor group, in order to both get some cash and to be able to spend more time with his family in Palo Alto and not concerned about his business and tied up capital in Japan. That being said, I think it necessary that Eberhart does his due diligence on the investor group to ensure they are legitimate and not scamming him, and to ensure that they will continue to build his brand in the future. The sum of money is also not insubstantial, at a time when spending time with his family is important.

If this investor group turns out to be illegitimate, he should still seek out new investors for the business, as exiting the business would also give Khoo more independence without the former CEO, Co-Founder and largest shareholder looking over his shoulder. Additionally, the business appears to need more cash to continue supplying to larger customers as well as to expand headcount. It is clear that Eberhart cannot continue to fund this expansion, and it is necessary to find an investor who can fund the expansion. Which leads me to believe he either needs to take another partner with deeper pockets and take dilution himself, but I believe it would be much easier and align more with his life goals to sell the business to the investor group, assuming they check out.  

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