When you sell
- it’s not yours anymore; and
- your upside is capped.
Start with Challenge #1. Ask yourself 4 “Are You OK With” questions:
- The name being changed?
- With the business being shut down in 2–5 years, if it isn’t strategic anymore — no matter how successful?
- With it being further sold to someone else?
- With it slowly declining over the coming years to irrelevance?
Make sure you are OK with these 4 outcomes.
If you are — and many are — then ask yourself Challenge #2: What if you could make 2x as much by holding on? Do you care? Will you care? Are you still OK selling?
Most founders I know end up looking back after selling, IF the acquisition was a success, and almost universally feel like they should have made 2x as much.
Will you also be at peace if it is a success?
If you are at peace both with it being wiped out, and if it is a success and you make 50% less than you could … then sell.
That’s the sign. If you could hold on and make 10x-100x, you’d never sell, so this discussion won’t even really be relevant in that scenario. But 2x is the inflection point, and the point of lament of many founders (odd as it may seem).
If you “pass” both these challenges — you’ll move on and be happy. I was the first time. The second time, not so much.