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harvesting the entrepreneurial venture

J. William Petty


Harvesting is the final phase in the entrepreneurial value creation process, which includes building, growing, and harvesting. Harvesting is the process entrepreneurs and investors use to exit a business and liquidate their investment in a firm. While all three phases are important pieces of the entrepreneurial process, many entrepreneurs who fail to execute a successful harvest do not realize the full benefits of their years of labor. Harvesting is the means for capturing or unlocking value, reducing risk, and creating exit options. It is about more than money, as it also involves personal and nonā€financial considerations. As a consequence, even upon realizing an acceptable monetary value for the firm, an entrepreneur who is not prepared for the lifestyle transition that accompanies the harvest may come away disappointed with the overall outcome. Thus, crafting a harvest strategy is as essential to the entrepreneur's personal success as it is to his or her financial success. The message to the entrepreneur is this: the time to develop an effective harvest strategy is now, not later. As a firm moves toward the harvest, two questions regarding value are of primary importance. First, are the current owners/managers creating value? You can harvest only what you have created. Value is created when a firm's return on invested capital is greater than the investors' opportunity cost of ... log in or subscribe to read full text

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