In this day and age of the post-recession economy, I might argue that my sweat equity is worth millions! Some might agree with me without even putting up a fight. I haven’t lost my job. I haven’t lost my house. And under the right circumstances and with just a little more perseverance and individual effort, I can produce phenomenal results that actually put a few more dollars in my pocket or that rainy-day fund. Unfortunately, I’ve never met a banker who would cash me out for my sweat equity alone!
I suppose that’s why it’s called entrepreneurship. Because the person with the sweat equity (me in this case) organizes a business venture – whatever that venture might be – and assumes all the risk for it. Don’t get me wrong… There is tremendous potential, and with the right idea and enough sweat one might create real equity and reap the benefits of his/her efforts one day.
That often takes a very long time to happen, and maybe more often than that never does. So in the meantime, most entrepreneurs continue to pour more sweat into their ventures hoping to produce real equity. A smart entrepreneur may diversify his/her eggs into a few different baskets. A true believer though will continue investing more and more of his/her sweat equity as if it really is worth millions. Should we all be so lucky as to cash out one day. Until then, I’ll try to stick to the basics of running my company without buying a yacht somewhere or new Lamborghini!