

In Defense of Selling Out - csmajorfive
http://bijansabet.com/post/63368000402/in-defense-of-selling-out

======
brianmcconnell
I sold my first company in 1999. We had a rapidly growing online catalog of
business phone systems and related products and service (PhoneZone).

In late 1998, we got a term sheet from a well known VC. The terms were ok,
except it was clear they wanted to replace me with a "seasoned" CEO, who I
expected would push us aside and build a top heavy organization. At the same
time, I had a chance meeting with the founder of Hello Direct, a successful
and public catalog retailer of similar products. We got an offer to sell in
the low millions.

Chump change right? It was pretty clear by then the dot com bubble was out of
control and that things were going to end badly. I decided it was better to
take some money off the table and join HD, since they'd probably do just fine.

Turned out to be a good decision. I was able to buy a house, and got through
the crash just fine. If we had tried to go all the way, I am 99% sure we'd
have burned through our funding and crashed and burned in 2000, and ended up
with nothing.

Like anything in life, whether to sell or not depends on the situation. In
retrospect, I wish I could have kept PhoneZone as an independent company. It
would have been a great business long term, but I don't think it was in the
cards due to forces beyond our control. So no regrets.

------
sejje
For a lot of people, the thrill is the creation, not the maintenance.

I don't blame anyone for selling, even if they just want to do something less
interesting, or nothing at all. Elon & Bill are great examples of good reasons
to sell, but so is virtually everyone who ever sold a company.

If the money and freedom is compelling enough to do it, by all means, do it.

------
javajosh
Sell out: "To abandon one's supporters or principles to seek profit or other
personal advantage."

There's a difference between "selling" and "selling out". Selling your company
does not mean necessarily mean "selling out". New ownership _often_ means new
control, new principles, new directions, often driven by pure money-motive, it
isn't always. Berkshire Hathaway is famously hands-off with its acquisitions,
for example.

~~~
jerf
While your distinction is a useful one, I think it's not a common one. Just as
there seems to be some sort of cultural rush to be the first to declare
something has jumped the shark, there's a very strong presumption that selling
simply is selling out, a conclusion that can be leaped to without anything so
tedious as examining the facts, and some sort of rush to be the first and
loudest to so declare.

~~~
mjn
It could be that I discuss in odd circles, but the distinction between the two
seems pretty commonly raised in my experience. Common to the extent that
arguing over which side of the dividing line a particular sale falls is _the_
key question often debated. The "con" side will argue that a given sale is not
only a sale in the literal sense, but _selling out_ in the more ethical sense
of failing to do right by one's fans/customers/whatever, letting the cash
being dangled lure you into doing something you wouldn't normally do. For
example, when CDDB "sold out" to Gracenote, which took it proprietary, the
problem wasn't just that CDDB sold at all, but that the trustees of a
community project sold out their community's trust for a cash payment.

The "pro" side will typically argue that a given sale is just changing
ownership structure but not fundamentally auctioning off their
values/trust/etc.

------
AznHisoka
For most us, the Holy Grail is to reach a point where you're financially
independent. Once you reach that point, almost anything is possible: you can
devote your creative energy to producing your vision, instead of wasting it in
a 9 to 5.

Attaining that billion dollars (which isn't assured) isn't so desirable or
important anymore once you reach this point.

------
brianbreslin
What do we consider going all the way? Permanent employment at ones startup?
Ipo? I think for many entrepreneurs who sell there are a ton of factors (short
term financial, boredom, new ideas they prefer to pursue, life changes, etc).
If you are a serial entrepreneur at heart, you have to sell, otherwise you
will feel trapped forever.

------
badman_ting
So weird. I really don't get why any human would disagree with what Gates is
doing.

~~~
gohrt
Especially since he retired 10ish years ago, so why should he bet his dreams
on something he doesn't control anymore?

------
EvanL
The logic is also based on the the idea of an equal trajectory for the company
regardless on management.

The landscape is too uncertain to ever know if you could have achieved the
same level of success. It's a what if scenario, a sunk cost and out of your
control the moment it happens.

It's two different scenarios so you always have the nagging question in mind
if you could have done it on your own.

------
herbig
"I didn't sell out son. I bought in."

------
sskates
Reminded me of
[http://paulgraham.com/prcmc.html](http://paulgraham.com/prcmc.html), which
equates selling your company to hiring someone else to manage it full time.
Otherwise you wouldn't be able to focus on anything else.

------
adventured
"Last week I read Bill Gates will have sold all of his Microsoft stock by the
year 2018 through a series of planned transactions that began many moons ago.
I was dismayed by this. Why would he sell all of his stock?"

I don't know why smart people keep repeating this over and over again. Who
says Bill has to sell all of his stock? His stock selling schedule does not go
to 2018. Yes, if he continues to sell at the current rate through 2018 all of
his stock will be gone, but that's an unrealistic extrapolation. Gates has
never said he plans to sell all of his stock by X date. He holds $63 billion
outside of Microsoft. I'd argue it's at least as likely that Gates will hold
onto a multi-billion dollar stake, and that his goal is to limit risk by not
having such a singular large position in any one investment. His goal being to
maximize the amount of money he can put to use in the foundation, and minimize
the chance of a big portfolio loss.

It's also worth noting that by 2018, he will have been sitting on that stock
for roughly 43 years! That's an extraordinary length of time for a founder or
any owner of any stock to hold.

~~~
hobs
The classic 43 year pump and dump, we should have seen it coming.

------
wellboy
The purpose of selling is that you can just build whatever you want and
increase your impact by having your hands in many things.

That´s what we are all in for, right?

