When to sell your company? Look for these signals

Nov 2, 2024

Startups are 16x more likely to be acquired than IPO; assess product, sales, and finances to decide when to sell.

When to sell your company? Look for these signals

: Startups are considerably more likely to be acquired than go public via IPO. Experts like Naveen Rao and Kamakshi Sivaramakrishnan emphasize the importance of recognizing acquisition as a viable outcome. Battery Ventures' Dharmesh Thakker advises using a three-point framework assessing product appeal, sales performance, and financial health to decide when selling is ideal. Proper acquisition deals should benefit founders, investors, and employees alike.

Startups have a 16 times higher chance of being acquired than achieving an IPO; this is a known reality in Silicon Valley, according to experts like Naveen Rao and Kamakshi Sivaramakrishnan. Despite the common focus on IPOs, both Rao and Sivaramakrishnan emphasize that founders should prepare for acquisitions, which often prove more successful.

Dharmesh Thakker from Battery Ventures elaborates on a method to determine when a company should consider selling. His framework involves evaluating the product's market traction, the sales and sales cycle, and the company's financial situation to guide decisions.

Thakker further underlines the importance of fair acquisition deals that include retention packages for employees. Rewarding employees can result in future entrepreneurial ventures, often yielding better outcomes for everyone involved.