

When to Sell Your Company - fraqed
https://medium.com/on-startups/6a25c0cbd358

======
ghshephard
He missed one other reason, which may not be the sort of thing you want to
discuss with your Board/Shareholders, but: "Opportunity Cost" - It may be that
you are happy running the company, that you have no imminent threat, and the
offer doesn't really capture all of your upside, but - the resources/team
might be better suited doing something with a greater return-on-investment.

~~~
jodi
I think that fits under personal choice. How can the team be dedicated and
"happy running the company" if they feel like they are missing an opportunity
elsewhere or being under utilized? I would say that is the number one reason
why founders get burned out and are "done". We all fear missed opportunity and
wasted potential.

~~~
ghshephard
There are lots of scenarios where people have found the job, culture, and
coworkers that they love, but are not yielding the greatest ROI of their
skills/knowledge/experience and connections.

The willingness to leave something you love, to go do something that will be
much more profitable, is not so much personal choice as cold-hard economics.

A good example is how a lot of lawyers will do not-for-profit legal work,
because they feel like they are making a difference, and improving the world.
They are making a personal choice to do something that is important for them
(or perhaps they are burned out in the corporate grind).

I've also seen lawyers leave the organizations that they love, because they
also realize they need to make a lot of money - usually to pay off ludicrous
college loans - but also just to leverage their position for some period of
time.

At the end of the day, every decision is "personal" - but I think there is a
difference between the emotive, "I chose to do this because I love doing it"
verus the colder, "I chose to do this because it maximizes the risk-adjusted
net-present-value of future earnings."

------
diego
Slightly tangential, but I signed up for Medium five months ago and I still
can't post. At this point Medium has a negative connotation in my mind, just
like Svbtle.

------
lazyjones
Perhaps these are the main reasons for hot shot startups and anything else
that goes on in Silicon Valley, but the average small/medium-sized company
might want to sell at some point due to the sentiment that the buyer can do a
better job at running the company or has some required resources that are
unobtainable (money, personnel) for the seller. Not a "personal" choice, but a
strategic sale for the future of the company and its employees.

------
AznHisoka
I think many people would love to be in a position where this question is
applicable to them. For the very few, the answer is: when someone wants or
offers to buy your company.

It's sort of like asking "How do you become a supermodel?"

~~~
mistercow
>For the very few, the answer is: when someone wants or offers to buy your
company.

It seems that way from the perspective of having never received an offer, but
my own experience makes me skeptical. I haven't been in that specific
position, but I have had a possibly analogous experience.

For a few years, I developed and supported myself with a graphics-tablet
targeted shareware drawing program (now sadly, due to changes in the Mac
shareware ecosystem, one of my backburner projects). One of the "big breaks" I
imagined might come my way would be if a tablet vendor wanted to bundle my
software with their hardware.

And one day, toward the end, I got an offer for exactly such a deal. A small
vendor wanted to include my program in a tablet bundle for a relatively small
holiday run. They wanted to know what I would charge per-license. I did some
research to find out what a typical OEM markdown would be and made them an
offer based on what I found. It was a significant discount, but it was a fair
price, and I'd have made reasonable money off of it. They responded saying
that this was far too much and that they really couldn't go over $1 per
license, which would have been more than a 95% markdown. I attempted to
negotiate further with them, but they stopped responding to my emails shortly
thereafter.

Should I have just taken them up on their initial offer? Well, as the cards
finally fell, I would have probably made more money that way. And if I'd known
that I would shortly be shifting my focus away from development of that
program, I might have made a different choice. But whether or not I made the
right choice given the information available to me is not the point. The point
is that it wasn't an easy "yes".

When you aren't getting any offers, it seems like _any_ offer would be a coup.
But that's not how the market works. If your company is worth $5000, there's
somebody out there who would be happy to pay you $200 for it. You won't _see_
many offers like that because the number of businesses worth $5000 is large
and the number of people who are willing to send out insulting offers is
relatively small. But "say yes to every offer" isn't a winning strategy.

~~~
brandnewlow
If they didn't write back, it's hard to imagine they were serious about the
offer. How likely is it they were just testing the waters with various
providers?

~~~
mistercow
It's also very likely that they weren't very competent. If I recall correctly,
they wanted this for a Christmas sale, and they contacted me about it in late
November.

------
DanielRibeiro
On the same topic: _How to sell your company_ [1]

[1] <http://www.jacquesmattheij.com/How+To+Sell+Your+Company>

------
Tekker
Apparently, it's before an article like this is written...:
[http://www.privco.com/livingsocial-receives-
emergency-110m-c...](http://www.privco.com/livingsocial-receives-
emergency-110m-cash-infusion-from-existing-investors-to-avoid-bankruptcy)

------
the_watcher
This is really interesting. Seems like Snapchat would have fallen into the
first two buckets (I can't see their upside being higher than an exit to
somewhere like Facebook or Twitter, but I'd be happy if I were wrong).

------
meandthebean
Aside: when did 20px become an acceptable font size for content text?

~~~
NelsonMinar
Yeah a little bigger would be better; it looks great at 24px. Afterall it's a
page full of nothing but text, might as well make the text big. But I think
they're still catering to folks with screens as small as 1280x1024.

