Managing, no matter what you manage or how you manage it, eventually you will come upon a “bet the company” decision. Over the last week I have been in a “bet the company decision” about our startup, it involves money, credit lines, advisors on both sides and two CEO’s who know this is an equitable win-win situation on both sides. Marshalling the people, the money, the contract has been one of the more unique experiences, but when you are betting the company, you need to have an intimate knowledge of every detail that is going into the deal.

Hands off management is one thing, but when you are bootstrapped, when you are literally dropping hundreds of hours into your company, and you want to make it successful, sometimes you have to be intimately involved with the process. When negotiating a very large deal (in my case this would be 50% of my annual revenue is at stake, and this is a truly bet your company deal when you are bootstrapped.) you need to understand all the details of the deal. You must know the P&L (Profit and Loss) and you must know how the market works to determine how the deal is going to shake out. If you do not understand your market and you are risking a significant portion of your business, the odds are highly likely that the deal will not work out the way you think it will.

You should also approach this from a worst case scenario, while the optimistic case might be great, if you approach it from a pessimist’s viewpoint; you are likely to make a better decision. The optimist view point might show a 300% gain (which ours does), but the pessimist if everything goes wrong view point is going to be appropriate in this case. The pessimist viewpoint for this deal for us is a 150% gain in sales over a nine month period. The worst case scenario is unlikely (our risk matrix and our board of advisors have gone through this deal with a fine tooth comb) in that even if the economy tanks, unemployment goes up, what we are dealing with and how we have approached our business over the last year and a half in this market niche demonstrates that we are doing the right things to keep the company growing.

Given the tight market, and the risk aversion to people spending money, or simply not having money to spend, and the current trends that we are having in sales, the deal is a good deal. This does not mean that there are not heart pounding moments, that there is a high level of uncertainty in what we are doing, or that we are worried about making a wrong decision. Sometimes the wrong decision happens, and when you are betting ½ of your annual income on a deal, you are going to worry. The worry is normal, it is good to worry, it is good to be up all night coming up with the worst case scenario, it is good to stay up and work out how to recover if the entire deal could kill your company. When you are betting the company, it is good to worry. There are a lot of folks dependent upon you making the right decision, and when you are betting the company it is also good to be upfront with everyone that will influenced by the decision. So far, everyone agrees that this will be a good deal, everyone is happy with the pessimists worst case scenario idea, of course we are all hoping that things work out on the best case scenario, but sometimes, betting the company is something you have to do to grow.

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