Business

A Business Owner With No Exit Strategy Can Still Be Happy, Wealthy, And Wise

I didn’t have an exit strategy for my business other than death.

A common piece of advice is to choose an exit strategy before you start, i.e. how are you going to get paid for the value of your business? Maybe you’ll go public, or sell to a private equity shop, or to a larger competitor. This will inform every decision you make, starting with your corporate structure. But I started Daruma because I never wanted to compromise how I practiced my craft as a bottom-up stock picker.

Selling my business would have meant selling out.

For a buyer to make a return, we would have had to grow assets considerably, or add lots of products. To do so would have meant compromising returns, because we ran a concentrated portfolio in an illiquid asset class. It would also have meant working for someone else. I started Daruma because I like being my own boss. Blame it on being a feral only child.

I wasn’t in business just to make the most money from it.

Old school stock picking is a creative pursuit, part 3rd grade math, part statistics, part psychology, and part detective work. I just wanted to practice my art and serve clients (mostly public pension funds) and created a business container to do so.

And that’s OK.

Monetization doesn’t have to be the only reason why you create your business. It can make for a good living and give your life purpose. Your business can be your happy place. Don’t let anyone tell you otherwise.

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