I started thinking about this question when I read this week that TaskRabbit is exploring a sale.
Now, many of us would glibly answer this question by saying “Whenever someone would want to buy me.” But put yourself in a situation where the company is growing and it’s not a matter of “if” but “when.” What conditions need to be in place for you to sell? What traps do you have to watch out for?
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I beg to differ. “Whenever someone would want to buy me.” is nothing less than a fool statement IMHO. Every single great company you can think of or name received many many offers on its route to greatness.... Yet they resisted those offers for various reasons, till it was the right time ... That is why it is absolutely important to have a full discussion and debate in the board on whether this is the right time. Full financial reports about past, present, potential and expected growth should be thoroughly discussed and challenged. The decision to sell and not to sell must both be challenged in every possible way.
If the board believes that your current income and potential growth over the next five years would allow you to reach a net worth of 1M, would you even consider an offer for 0.5M? I would not.
My answer to your question is: the board must discuss, challenge, debate and agree on a decision that a two third majority approves.
I am not fortunate enough to be in this position, so am not really qualified to answer however my instinct tells me that a knee jerk decissision of "whenever someone wants it" would be regrettable, I would say that an exit strategy should be put in place very early even as early as the earliest of business plans, based on how far you can and want to take the business.