Good companies receive buy not sell.
This quote has been passed down as common wisdom through generations of entrepreneurs, but it doesn’t tell the whole story. While IPOs are seen as the pinnacle for venture-backed startups, more companies see successful exits through an M&A process than by going public. To be bought by the best buyer for you, you have to plan carefully, and, yes, sell.
As an entrepreneur, you can start your company because you want to make a big impact. You are building something that you truly believe will change the world in a positive way. And yes, there is also an implied financial outcome there. Everyone – be it your investors, the media, your team – will often focus on an exit strategy in the context of financial results.
Any investor or mentor will tell you that when a company says they want to buy you, the correct answer is, “We’re not for sale.”
In my experience, many founders are driven more by impact potential. For founders of this type, my advice is to always consider an acquisition an option. It may not be obvious at first, but an acquisition could be your best route to scale.
Prior to becoming an early stage investor at DTC, I led mergers and acquisitions and business development for Microsoft across Europe and Israel. I was on the other side of the negotiation as Microsoft searched for innovative teams and technologies to bring to its operations. Founders who can get the most out of the acquisition process are the ones who planned it from day one.
Planning a potential acquisition is not an excuse
Companies are 10 times more likely to be sold than listing shares.