When should a founder fold? When should a founder give up? This is a question. I was chatting to a close friend about just this summer, about his business, where he was in a very difficult situation. They had their worst year for seven years. They had $5 million of cash invested in the business. No exit in sight. And quite frankly, energy was missing; the founder’s energy and vision were very much depleted. That was the question we were discussing over breakfast: Should he fold and move on to do something else?

Well, we spent some time discussing, and what I advised him to do was to carefully look at his options, considering the positives and the negatives. Once we had done that, it became clear that still one of his best opportunities was the business he was in. Therefore, he should really grip the issue and get to cash flow break even as soon as possible. As the Brits like to say, "cut his coat according to his cloth." With that, it would give him lots of freedom, and I think bring back some of the founder energy.

What I find with founders and CEOs is that sometimes when you're in a dark, very difficult place, often all you need is some prolonged time off. Maybe it's a week, maybe it's two weeks, maybe it's a month—just take time off, and you can come back with new energy and a new vision. Then, the next thing we looked at was founder diversification. What could he do with his other businesses to focus on those as well? Carving out time for other cash flow generating activities or other businesses would help him build a portfolio of interesting opportunities.

So, there you have it. I think in most cases, it is often the wrong decision for a founder to fold. Sometimes, you just need to look at it from a different angle, get some help, get someone else to give you some great advice, look at your options, look at cashflow and grip the issue. Ask yourself, what else can you diversify into? How can you bring new energy back into your business?