"You don't have a right to the cards you believe you should have been dealt. You have an obligation to play the hell out of the ones you're holding."

Cheryl Strayed, Best-Selling Author, Wild: From Lost to Found on the Pacific Crest Trail

I was recently in talks to acquire a business. It was going to be a complicated deal.

There were two camps of owners, each with a 50 percent stake. Each camp was made up of several individuals. My goal was to buy out one of the 50 percent blocks and then invest significant working capital into the remaining company. The result of this investment would dilute the other shareholder group down to 25 percent, leaving me as the majority owner at 75 percent.

These two ownership groups did not get along. At all.

They'd started this company together three years ago with high hopes. On paper, they possessed a nice set of complementary skills. They had some good, but not great financial backing and a product that served a real niche.

In the risky world of starting a business, they had as good a chance as any to make it.

They shot out of the gate strong. They received tons of good coverage and over performed their best-case-scenario projections. In the first year, things could not have gone better.

Or so it seemed. 

About a year in, egos started to show up. Individuals began claiming credit for wins and assigning blame for losses. They started to disagree on strategy and tactics.

It wasn't long before this dysfunction showed up in performance. This led to more fingerpointing. Each group became expert at confessing the sins of the other.

In talks I give to MBA students and budding entrepreneurs, there is an art and a science to success.

The company had the science of making it nailed. They utterly failed at the art.

By the start of the third year, the two camps literally did not speak to each other. The business was floundering. They'd reached a point of no return.

I was introduced to the company by a colleague. I liked the science of the business straight away. It made sense to me. The fast start was proof positive that this thing could make it. I could also see immediately that the group was badly broken.

Egos made that chasm irreparable. But I was interested in trying to get a deal done.

I met with each group separately and had the same message for them all.

"This is a complicated deal. I'd like to give it a go to get something done, but you should all know that things have to work perfectly for this to get to the finish line. Everyone's going to have to put the past behind them and check your egos at the door."

The conversations with the "buyout" group went smooth. We agreed on terms quickly. I was hopeful.

I presented terms to the group that would remain as operators. There was immediate resistance. They did not like the level of dilution they'd experience with these terms.

But I was their only potential investor. They had no other options. And given the state of the business, I knew these terms were more than fair. Their attorney agreed and advised them to do it.

In a final meeting to try and salvage something, I asked about their reluctance to move forward.

"Well, we started out so strong. If we'd have kept on that trajectory, we'd be worth so much more. We don't feel like we should pay the price because those other guys were so bad. We think we're worth more."


At this point, I felt I had a final swing. I searched for something to say. On a whim, I remembered this quote from Cheryl Strayed, author of Wild, the book and movie.

"Well, I read this great quote the other day. It was from an author named Cheryl Strayed. Here it is, "You don't have a right to the cards you believe you should have been dealt. You have an obligation to play the hell out of the ones you're holding." Guys, you are where you are. At this moment in time, you're worth what someone will pay and this is a fair deal. It gives you the opportunity to make something out of this."

They sat silent.

Did I really just quote Cheryl Strayed?

I did. And it ended up not working. These guys balked again, giving me cold feet. Unfortunately, the business didn't make it.

But there's still a lesson here. Many entrepreneurs get so hung up on where they think they should be that they lose sight of where they are. It creates a lack of clarity around the real circumstances they face today. They make poor decisions--some fatal--because of it.

You are where are. Play your cards accordingly.