Complexity Hides Fragility: Losing a $20m Business

And we were about a week away from making all the changes needed for that. And, um, we are and, and, and doing a capital call and everything else. And we're trying to pull the levers to make sure.

And I'm just going through the, the model like one more time. One more time. Go through the model one more time and doing sensitivity analysis. Because, you know, one of the things that I did not appreciate the first time we did this deal was, hey, sensitivity analysis wise, we're screwed if things go bad, right?

And I said, all right, what are our new gross profit margin numbers? Right. They shift by a couple percent. And it dipped for August and it dipped to the point where it broke the model.

It could have been fixable, but we've had no ability to control our margins because we can't control what's diagnosed every month. Right. And so if we have any kind of dip like that, it can break the model and eventually could come back up. But that's just a risk we have no control over.

So I just sat there and I'm like, we never took another, you know, other than the first deal when we, we raised the capital, we Never did another turn of the hat, another capital call, anything like that. And so this is our second capital call now. It'd been two years, two and a half years.

And I just had this pit in my stomach, like, I can't. I can't take another dime. And so I. I got the board together the next day and just said, hey, this is what I'm seeing.

And I do not feel like your money's safe. I feel like if you put money into this business, you're going to lose it. And. And so we made the call to close the doors at that point, and within three days, I was out.

And Jess, crazy enough because she actually had all the financial controls and we hadn't transferred everything over yet. She ended up staying another two months to help actually shut down the business and hand it over to the bank. And so that was the process that we went through.

Is. Is that. And it was wildly painful. I don't think I made the wrong call whatsoever. I think we had no control over our gross margin.

And to, you know, we. We had to hit X and we were fluctuating up and down. And, you know, at some point, our suppliers, because we're behind some payments, we're gonna shut the faucet off at some point.

And. And that was going to be an issue. And so. So, yeah, just. It just seemed like we're putting good money after bad and decided to be done.