Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, offers candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at firstname.lastname@example.org.
Q. My rapidly growing company caught the eyes of a bigger company. We’ve been approached to see if we’re open to being acquired. Should we consider this?
—Founder of a breakout company
It’s a good question. You have a breakout. Now what do you do?
The answer: It depends. If you love what you do and there’s traction and a clear path ahead, the company will probably become more valuable than it is today. If you see that it will be stronger in the future, you might be selling too early.
My sense is that if you’ve made it to breakout-land and have happy customers who like your products or service, you will probably be stronger staying on your own—as long as you learn how to scale. The good news is that this problem has been solved way more times than getting to relevance, which is a much harder problem that you’ve already tackled.
You know your company better than anyone, including any acquirer. Just as you have more conviction and hope, you may also be more pessimistic because you know the struggles and pain points. Use that knowledge to help guide you. Selling makes sense if you are in a market that might not be around forever, or if the acquirer has the ability to accelerate your vision. The question you have to ask yourself is whether combining forces will help you go further faster than you could on your own. An acquisition by the right company can put everything on steroids. But also know that sometimes acquisitions kill off what’s special about what you do.
At this point it also makes sense to do some soul searching on your motivation. What do you want? If you desire to ride it out, and own it, and lead it, running it might be the right thing (as long as you are convinced that it will keep getting better). If what you really care about is that the world gets the idea or service, being acquired can be the right thing. I am suggesting introspection, but then I’d like you to let go of the personal and do what is best for the company. That is how you will make the right decision.
You should celebrate that you have taken the company to this stage where there are people interested in acquiring it—that’s success. This is not a dilemma; this is an amazing opportunity that will help you determine what you need to do to get your company to the next level.