Get good companies bought not sold.
This adage has been passed down through generations of entrepreneurs as folk wisdom, but it doesn’t tell the whole story. While going public has been cited as the pinnacle for venture-backed startups, far more companies see successful exits through an M&A process than through an IPO. Being bought for you by the best buyer requires careful planning and, yes, selling.
As an entrepreneur, you probably started your business because you wanted to make a difference. You are building something that you truly believe will change the world in a positive direction. And yes, there is an implied financial result as well. People – maybe your investors, the media, your team – often focus on the exit strategy in the context of a financial outcome.
Any investor or mentor will tell you that when a company says they want to buy you, the correct answer is, “We’re not for sale.”
In my experience, many founders are more motivated by the potential for impact. For these types of founders, my advice is to always consider an acquisition as an option. It may not seem obvious at first, but an acquisition can be the best path to massive growth.
Before becoming an early stage investor in DTC, I led business development and M&A for Microsoft across Europe and Israel. I was on the other side of the negotiations when Microsoft was looking for innovative teams and technologies to bring to the table. The founders who were able to benefit most from the acquisition process were the ones who planned it from day one.
Planning a potential acquisition is not a defeatist attitude
Companies are 10 times more likely to be sold than listed.
Getting acquired is a legitimate strategy for building your business – TechCrunch Source link Getting acquired is a legitimate strategy for building your business – TechCrunch