We see it on TechCrunch and all those media the amount of money that is allocated for M&A transactions.
However, we never see what really happens behind the curtains and the sequence of events and emotions that a founder goes through when they need to detach themselves from their baby. The project they have poor all their tears, blood, and sweat into for 5 to 10 years.
Does any of you have any insights as to what it feels to have your startup acquired and what are the rollercoaster of emotions ahead of you?
Sold my first proper start-up last year to a US VS company, and overwhelming feeling was of elation, surprise and relief. Elation, because it was a good price and I now have the freedom to do whatever I want in life, surprise, that we had really grown my bedroom idea into a company ready to sell for good money, and relief, that I could get my life back (it was pretty all consuming!).
I founded my first startup when I was in college to fund my college living expenses. I sold it to some freshman at the end of my senior year as I was moving to a distant city for Grad school. I made a nice profit on the sale which totally delighted me as I had expected to have to abandon my company when I left.
20 years later I joined the early team of a PARC spinout. For 2 years we busted our tails to become the leader in a new market we pioneered. We were the market leader, for a variety of reasons our 2 major competitors were able to IPO for big bucks, but we just missed the DotCom IPO bubble and got caught in the DotCom IPO crash. We had 3 down rounds before selling to Microsoft. That time my primary emotion was relief and a bit of disapointment that we came so close to being a big winner.
The other startups have mostly all not made it.
I advise young first time entrepreneurs.
Some want to build a company to provide them lifetime employment. I suggest they avoid taking VC investor money and create a "lifestyle" business, because a VC's investment is a large capital gain not ongoing dividends. VCs achieve their goal only when the company is sold (98% of the cases) or IPO (the exceptional few). So don't take VC money if your goals are not aligned.
If you are a serial founder, your company is getting too big and no fun any more and you will probably already thinking about your post sale "next act". You probably have complex feelings about the timing and circumstances but it is likely not dissimilar to watching your children leave home and build their own lives; you hope they will be successful and won't forget you but that was a moment you always expected someday and you worked to launch them well.
If you imagined you will be a lifelong CEO of your first company and you take VC money you should either plan to be very lucky or prepare for a change of plans.
shear relief. the leadup to it is sooooo stressful as these strangers pour over every single piece of paper you have ever produced and ask you a zillion questions. when the actual signing comes you are excited for the 2 mins it takes, then you go and half half a dozen shandy's. and then go home and cry. but seriously, the one big piece of advice is don't dive straight into something new Book the first flight out to the Maldives and take 3-6 months off. Get over losing your baby and free your mind to think "what next".
There were some twinges at the loss of control over my baby when I sold Anonymizer but overall it was a massive sense of relief. After 13 years of having basically 100% of my net worth at risk in the company and every crisis feeling like it was existential I could take my chips off the table and relax. It was wonderful.
Fortunately the exit was voluntary, on great terms, and to a great company that I am still working with 7 years later.
It is critical to understand how your role is changing and to let go of your former status gracefully.
I have been here. It is a happy day when the context is the economics and validation of your vision, mission, and ambition. It will rip you in half that it is not yours any longer, particularly if the acquirer replaces you with their people as happened to me.