A naukri.com initiative
TechCrunch
2w
232
Image Credit: TechCrunch
When to sell your company? Look for these signals
- Startups are 16 times more likely to get acquired than to go public, making it an outcome founders should prepare for.
- Acquisitions statistically are more likely than IPOs, and certainly something that founders have to mentally and physically prepare for.
- Founders must analyze their company using a three-point framework- product, sales and sales cycle, and balance sheet- when deciding whether to sell or not.
- If a company is struggling to gain traction in the market, it might warrant a pivot or might be worth cashing out.
- If two of the three items in Thakker’s analysis framework aren’t positive, it’s worth reconsidering the decision.
- When it’s time to sell, founders should negotiate a deal that’s equitable not just for founders and investors, but their employees as well.
- According to Rao and Sivaramakrishnan, they didn’t start their companies with the intention of selling them but when the right deal with the right company came along, it made sense.
- It can be challenging for founders to decide when it’s time to sell, as they try to strike the balance between holding on and maximizing value.
- The reality is, most investors have a few hits that make 100x and they pay the fund. The rest of it, whether you make a 1x or a 0.5x or a 2x, it kind of doesn’t really matter.
- Founders must ensure they don't set themselves up to sell the company, as it will always be bent that way, and the outcome will never be as good.
Read Full Article
13 Likes
For uninterrupted reading, download the app