Parting with your startup can be difficult, but it might make the most financial sense.
There comes a time when the startup is no longer your baby. It’s now grown and potential suitors are sniffing around, trying to find a profitable way in. You’re torn between continuing to grow your startup and letting it go -- for a price. It’s never easy knowing if you should sell your startup, but here are some ways to know what to do.
Do You Still Like It?
It’s a really subjective but important question: Do you still like running your startup? If the answer is yes, that’s a big reason to keep it over selling it. There’s no reason to get rid of a business if you enjoy being part of the active running of it. On the other hand, if the company looking to buy your startup wants to keep you in a management position, consider staying on. You’ll likely be able to draw a handsome salary with fewer headaches.
How Is Your Team Doing?
If there’s lots of infighting in your team and you think you’re about to experience some serious attrition, it might be time to sell. A lot of times, the magic is contained in your team. While your company and its products and services are valuable, the team might be what makes all that possible. If you’re looking at a high rate of attrition, consider getting out while the getting is good.
How’s the Competition Doing?
Are you about to be utterly destroyed by the competition? That means it’s time to sell, and there really is no better time. Think back to the days of Microsoft before the antitrust lawsuit. They outfoxed Netscape by giving away similar products for free to customers who purchased Microsoft Windows-based computers. If you anticipate being in a similar situation, sell sell sell.
Do You Need Steady Income?
This question cuts both ways. On the one hand, if your company provides you with steady income you have little reason to sell -- though chances are, if you built a successful company from the ground up, you aren’t ever going to have trouble finding work. On the other hand, if you have a sharp and pressing financial need, you should look into getting rid of the company when you get an offer. The extra cash can take care of your financial worries in a hurry.
What Do Your Colleagues Think?
Never be afraid to ask for advice from other people in the field you think you can trust. They can see the situation from a more objective place. This makes their advice particularly valuable. Only ask people who opinion you trust, both from the point of view of giving you the best advice possible and of being informed about the generals and specifics of your situation.
To Sell Or Not To Sell?
Deciding whether or not to sell your startup is one of the hardest decisions an entrepreneur can make. Still, no matter what you choose, you can find yourself happy and satisfied with the decision. Just make sure you give the matter the care and thought it deserves and you will arrive at the right decision for you and your company.