PierCap Partners At Sage Talks: Sweat Equity Is The Most Valuable Equity There Is!

Zaheer Dhruv discusses sweat equity – how do you know it’s the right time to bank it?

On September 27, Zaheer Dhruv spoke at Sage Talks Orange County – Sage Executive Group’s signature event for Orange County. Sage Executive Group is a San Diego–based peer-to-peer advisory organization for top business leaders. Modeled on the Sage Talks program held in San Diego the last three years, each Sage Talk covered diverse topics ranging from the franchise travails of Krispy Kreme to the implications of our cultural addiction to blame.

Zaheer spoke at length about banking sweat equity – the timing and considerations required to maximize it’s value.

The five takeaways from Zaheer’s message were as follows:

  1. There is no doubt that sweat equity is the most important equity there is. The question is, not if but when, business owners should be thinking about taking it the bank.
  2. Ignorance is not bliss when it comes to banking sweat equity. 8 out of 10 business owners today have at least 1 or 2 unsolicited offers in hand, but 10 out of 10 don’t know whether the offers are the right ones or the best ones.
  3. The right time is when three forces align – personal priorities, business cycle and market receptivity. There is no silver bullet – every business has it’s own story and what may be right for one may not be applicable for others.
  4. Surf’s up right now! To ride the wave, you have to be in the waters – prepare and then paddle to catch the right swell.
  5. Ultimately, taking action depends on one’s perception of timing. If you have ever entertained an idea of an exit or banking your equity in the next 2-5 years, this is probably one of the best times to explore tailored options that are available to you!

Specifically, in the answer to a question about timing, Zaheer noted, “We believe, the right time is usually a balance of personal priorities, business

cycle and market forces. It is never next year when cash flows are higher, but always better when you have some personal runway and sufficient growth opportunities exist for your business…cash flow is only one piece of the overall value.”

Attendee business owners really enjoyed the lens with which the insights were shared and as always, left the event with thought-provoking, actionable takeaways.

About PierCap Partners:

We are a mergers and acquisitions (M&A) investment bank based in San Diego and Irvine, CA. M&A is our singular focus. Whether you are thinking of acquiring a business, or selling your business, we run a well-disciplined process that secures best possible value, minimizes disruption and manages the delicate balance and spirit of collaboration. With over $2 billion in aggregate transaction value and 35+ years of combined experience, our leaders bring operational expertise, an owner’s perspective, and Wall Street solutions to you. Find out more about our focus, services and experience.