Think BIG!

Sell too soon, and you leave money on the table.  Sell too late, maybe there’s nobody left to acquire you.  Don’t sell at all?  Might just not leave a choice, but to build a big, successful company.

There are many stories about companies that received offers, declined them, and then later either disappeared, or were acquired for peanuts.  When AOL acquired Mirabilis (ICQ) back in 1998 for $287M in cash, many felt they were sold too cheaply.  Could be.  What I’m more worried  about are companies that are sold sub-$100M, essentially as technology plugs, before they can scale and prove their value.  This is where we all loose – entrepreneurs and venture capitalists alike.

So how to avoid the temptation to sell???  Actually, this starts day 1. If you don’t swing for the fence, you’ll never hit a home run.  Sometimes, a great swing, doesn’t quite make it, and you get a solid base hit.  (Yes, my America roots show a bit). 

In my mind, why would you want to sell for $100M, if you can continue to build and make it to $350M? I certainly don’t like leaving money on the table!!!  My investors don’t like it either, and actually, neither should the entrepreneurs, nor their spouses .

Tags: venture+capital, mirabilis, icq, m&A

Comments

[Diego]

It should be interesting a correlation study of cheap sells and married entrepreneurs :-)

[nm]

This post is so typically VC. For the entrepreneur it is the same if he makes $2M or $6M. For the VC falling short of $100M seems like a loss. How many companies turned into zombies (no one cares about them) because they passed on a m&a or sale that the VC thought was under value? It's better off to sell sub $100m than to not sell at all. Saying that ICQ sale was cheap is naive... how much revenue (not to talk about profit) did ICQ generate AOL?

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