

Who Decides When To Exit? - adityakothadiya
http://www.avc.com/a_vc/2009/09/who-decides-when-to-exit.html

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Even when a startup seems to be doing very well, and is able to attract new
rounds on favorable valuations, the insiders may be able to discern weaknesses
such as weak or quarrelling founders, VCs with defocusing aspirations, or
strategies with limited term potential (e.g., reliance on a third party such
as Yodlee for critical technology). This means that chances of continuing
success are lower than appears to outsiders, and the insiders are wise to sell
at the temporarily favorable valuations. The VCs can be easily convinced to
agree merely by frank discussion of the weaknesses, but both the founders and
the VCs are motivated to claim that the sale was best for everyone, and to
have the initial transition or work-out go smoothly. Once the money is in the
bank and any hold-backs are settled and released, there is time to drift away
from the acquirer.

