Good companies get bought not sold.
This saying has been passed down from generation to generation as common wisdom, but it doesn’t tell the whole story. While IPOs are considered the pinnacle for venture capital-backed startups, many more companies achieve successful exits through M&A than through going public. Being bought by the best buyer for you requires thoughtful planning and, yes, selling.
As an entrepreneur, you probably started your company because you wanted to make a big impact. You are building something that you truly believe will change the world in a positive direction. And yes, it also implies a financial result. People—perhaps your investors, the media, your team—will often focus on an exit strategy in the context of bottom line.
Any investor or mentor will tell you that when a company says it wants to buy you, the correct answer is “We’re not selling.”
In my experience, many founders are more motivated by impact potential. My advice to these founders: always consider acquisition as an option. It may not be obvious at first, but acquisition may be your best path to mass scale.
Before becoming an early investor in DTC, I was involved in business development and M&A of Microsoft in Europe and Israel. I was on the other side of the negotiations as Microsoft was looking for innovative teams and technologies that could be used to their advantage. The founders who were able to benefit the most from the acquisition process were the ones who planned it from day one.
Planning for a potential acquisition is not a defeatist attitude.
Companies are 10 times more likely to be sold than listed.
Credit: techcrunch.com /