Dear SaaStr: We’ve Gotten a Good But Not Great Acquisition Offer. Should I Take It?
Should you sell your startup if you get a good M&A offer?
For years, while I pretended to be neutral on this question, I’d still quietly root for founders not to sell if growth was strong:
- Why sell at $10m growing 100%, if in 12 months, you’ll be worth twice as much?
- Why sell at $20m growing 80%, if in 5-6 years, you could be a unicorn?
- It compounds in SaaS. 100%+ NRR is your ally in going long.
To some extent, I still believe this, but now I’ve seen more and more that sometimes that second good offer never comes.
That sometimes, founders get too tired to push on to the next level. That sometimes, as good as you are, the competition ends up moving even faster.
Now I’ve come up with a more nuanced view on M&A offers:
- If you get a good one, default to Yes unless you are >sure< the answer is No.
- If you are sure, push on. If you are sure there is much more value to come on, and have 100%+ NRR, then push on. If you know it’s just getting good for real, then push on.
- But if you aren’t sure, probably … take the offer.
I’ve seen a second good one just never come again, or come too late, too many times. The best will never look back on saying No. They won’t. But the rest of us probably will.
