11–20 of 34 posts
If you're not looking for your exit too hard it just might come your way anyway, and building a solid business is one way to work towards that goal.
If you're only focused on your exit and it doesn't happen or the timing is off you are probably in a lot of trouble.
I never really understood this debate... as if all companies should go big, or all companies should stay small/medium. Every business is different. Businesses have varying amounts of potential for growth, varying numbers of possible revenue streams, and even varying numbers of directions in which to pivot should things hit a wall. If you're selling people hands-on classes in underwater basket-weaving, it's probably n…
"And if you’re lucky enough to get a life-changing acquisition offer like Mike Arrington just did, follow his example. Go for the billion dollars when you start your next company—by then you’ll have more experience and you won’t be risking the kids’ college education."
His mistake is to forget that the two options aren't exclusive. A large percentage of founders in startups successful enough to be on their way to being worth a billion dollars manage to cash out partially en route. So you don't have to choose between trying to make the company a big success and your kids' educations.
How do you decide whether or not to sell? There are two factors to consider: how much you like the work, and how good the offer is. If working on the company is what you want to do with your life, as it seems to be for Mark Zuckerberg for example, then you shouldn't sell unless you need to. Whereas if someone makes you an offer so good you'd be crazy to refuse it, then you might want to take it, even if you hadn't planned to sell.
(Strictly speaking, if you have shareholders, you have a fiduciary duty to do whatever's right for them. But since the founders' level of motivation is usually the dominant factor in the future value of early stage startups, in practice that usually reduces to doing what you prefer.)
This is wrong: "And if you’re lucky enough to get a life-changing acquisition offer like Mike Arrington just did, follow his example. Go for the billion dollars when you start your next company—by then you’ll have more experience and you won’t be risking the kids’ college education." His mistake is to forget that the two options aren't exclusive. A large percentage of founders in startups successful enough to be on t…
I had sent some critical comments back but it seemed the rest of the class, which didn't have any real-world experience whatsoever, took all of Wadhwa's essays as gospel.
Earlier quoted context omitted.
Well, a billion dollar company might enable you to make a 'bigger' difference. You help make your employees wealthy (Google's millionaire emplyees), you help shape whatever sector you're in (hopefully for the better). You create value for you shareholders. Everyone's a winner, theoretically.
Your argument is only true for people who have only one business idea. If you have a wealth of ideas, you can execute one and sell at a point that gets security for your self and your family, then execute another and aim bigger, but with your downside risk eliminated.
I never really understood this debate... as if all companies should go big, or all companies should stay small/medium. Every business is different. Businesses have varying amounts of potential for growth, varying numbers of possible revenue streams, and even varying numbers of directions in which to pivot should things hit a wall. If you're selling people hands-on classes in underwater basket-weaving, it's probably n…
The debate is for people/companies who have a choice-- obviously you're right about the fact that there's no debate where there is no choice. Mint sold for $150m, but perhaps could've aimed bigger. Blogger sold pretty early-- perhaps they could've been/beaten WordPress. Google famously tried to sell for $1m to Excite. LOTS of companies who sell early have an opportunity to aim bigger. I think partial cash-out Series…
I think cashing out a couple million only works when a) the founders are obsessed with the company's mission above all else b) the acquisition offer is small enough that VCs can give the founders ~20% of their would-be cash now.
I don't even understand the debate: Your lifespan, healthspan, lifetime happiness and ability to run a company will only go up once you cash out for 4-10 million or more. You've literally solved the money problem at that point. Why would you risk that on a vanity billion dollar exit?
It is basically the Achilles question, right? Durable since the classics: would you like to live long or die gloriously?
(Like most dichotomies, there are almost certainly options in the solution set not mentioned.)
Earlier quoted context omitted.
Your argument is only true for people who have only one business idea. If you have a wealth of ideas, you can execute one and sell at a point that gets security for your self and your family, then execute another and aim bigger, but with your downside risk eliminated.
Is that common, though? When I think of companies that shaped the tech industry in a huge way, very few are companies founded by people who had already had a big exit and were on to their second or third company after already becoming millionaires. Impact on the scale of Apple, Google, Microsoft, Sun, nVidia, Oracle, etc., seems to involve founders who stay with their companies and guide them over a period of decades…
Here's a question to test if you really believe the argument you seem to be making:
You have the idea of your lifetime. It's a billion dollar idea. You are looking for a co-founder, and find two amazing prospects.
They are equal in every way (education, drive, interests, etc) except one: Jim spent the past five years working at a startup that he just sold for $20m. Tim spent the past five years working in an office job.
You can only pick one of them. Do you prefer Tim or Jim?
Life changing work is more important.