Good firms get purchased not bought.
This saying has been handed down as typical knowledge by way of generations of entrepreneurs, however it doesn’t inform all the story. Whereas the IPO is characterised as the head for venture-backed startups, way more firms see profitable exits through an M&A course of than by going public. Being purchased by the very best acquirer for you takes considerate planning, and, sure, promoting.
As an entrepreneur, you most likely began your organization since you needed to make a big effect. You’re constructing one thing that you simply really imagine will shift the world in a constructive route. And sure, there’s additionally an implied monetary end result there. Folks — perhaps your buyers, the media, your staff — will typically concentrate on the exit technique within the context of a monetary end result.
Any investor or mentor will inform you that when an organization says they wish to purchase you, the fitting reply is, “We’re not on the market.”
In my expertise, many founders are extra motivated by the potential for influence. For these sorts of founders, my recommendation is to at all times take into account acquisition as an possibility. It won’t be apparent at first, however an acquisition will be your greatest path to huge scale.
Previous to turning into an early-stage investor at DTC, I ran enterprise improvement and M&A for Microsoft throughout Europe and Israel. I used to be on the opposite aspect of the negotiations as Microsoft regarded for modern groups and applied sciences to carry into its fold. The founders who have been capable of capitalize essentially the most on the acquisition course of have been those that’d deliberate for it from day one.
Planning for a possible acquisition is just not a defeatist angle
Firms are 10x extra prone to be bought than to go public.