[MUSIC PLAYING]
[DOG BARKING]
Here, Maggie.
Ready?
Go get it.
Oh, Broccoli, you're my guardian, aren't you?
You're still our baby, though.
You know that, right?
Baby number one, baby number two.
[PHONE RINGING]
Baby number three?
Yep, and baby number four.
[LAUGHTER]
Matt, I need to figure this out.
Can we walk and talk?
Sure.
[PHONE BUZZING]
[PHONE DINGING]
2 Proud Pups is Elena's small business, selling
all-natural dog care products.
She launched it because she hadn't liked any
of the existing dog shampoos.
They were full of chemicals that irritated her puppy's skin.
So she invested her own savings and created a product
she felt good about using on her own dogs.
Before long, she had devoted retailers.
And over the next six years, her staff and product line grew.
2 Proud Pups products are now carried by more than 1,000
independent pet stores nationwide.
I'm so proud of myself and this business.
I managed six years of growth on my own, investing my own money
and taking out loans.
But now, I have a big decision to make.
My beloved products are selling well, but revenues are flat.
I'm also pretty burned out.
Plus, with this one coming soon, I need a break.
And we've been talking about buying a bigger house
and getting a college fund started.
Exactly.
It's just time for a change.
And honestly, just because I'm the founder doesn't mean
I'm the right person to take the company into the future.
True.
So what do you see as your choices?
OK, option one?
Hire a new CEO.
Or option two, sell the company.
For the CEO search, didn't you say the applicants
from the small business listing you posted were not amazing?
Yeah, the best so far is Christine, a young, smart MBA
with glowing references from her startup and consumer products
experience.
She has a growth plan that includes targeting
Amazon, Chewy, and Petco.
This could be promising from a financial standpoint,
but it just isn't the same as my vision for 2 Proud Pups.
Christine is OK with a modest salary
and accruing more shares each year,
but she's only ready to take a 40% equity stake,
and I feel split about this.
If she took a larger stake, that would give us
more cash upfront.
But being the majority shareholder
and not having to deal with the day-to-day operations
is also appealing.
Hm.
Does Christine have much of a proven track record?
Not really, and it could get messy
if we don't see eye to eye or if she
doesn't click with my vendors.
I worry I may need to get more involved than I
can or want to be.
Hm.
Maybe you should keep the CEO search open
until you find a better match.
Remind me about option two.
Option two is selling to a competitor.
It would be easier and less personal,
but selling is complicated, too.
I have been talking to Doghouse Luxe, the luxury dog food
company that makes these treats our dogs like.
Doghouse's philosophy is similar to ours,
but they sell mostly to consumers
directly through their website.
Their website could be the perfect niche
market for 2 Proud Pups.
Your products could reach a whole new base
of pet owners and their pets.
Exactly.
I love that part, and the offer of a cash buyout
and 10% of the merged entity is tempting.
It would be a cleaner break from the company for me.
It also means a much larger payout
as well, which is good for us.
And they seem to have an impressive track
record of rolling up small businesses like mine
into larger, more successful ones.
But how are you going to feel if you
have little or no influence over 2 Proud Pups brand
or products going forward?
Very mixed.
And how can I ensure they won't change
ingredients to cut costs?
Or what if they don't make sure my employees are taken care of?
What if I want to return to the company
when our kids are older?
And companies like Doghouse may put small, independent stores
out of business like all my vendors who I adore.
What if the merger doesn't go smoothly?
Hm.
Sounds like neither option is perfect.
Nope.
What do you think, pups?
What's the best option for the future of our little company?
[DOG BARKING]
What do you think Elana should do, try to find a new CEO
or sell the company?
Does she have other options?