Q: Would you rather own 100% of a company worth 100 million or 10% of a company worth 1 billion?

This is the greatest question for ambitious founders. I’ve thought about it a lot. I’ve lived it (a version of it). And I think about it every single day.

I remember when Aaron Levie turned down a $600m+ acquisition for Box years ago, before SaaS went on a tear. Even today, it would have probably been a better financial deal for him, because it also included $200m in payments for the founders, and avoided the dilution from the IPO, etc. And years and years of hard work and drama.

And yet Aaron said, “If I sell, what would I do?”

But by any rational metric, they should have sold.

I thought he was a little crazy at the time. He is. But he was right.

What it’s like when someone offers you $600 million, and you say no

I did the opposite. In my first start-up, we sold for $50m after 12.5 months. I hardly owned 100%, but it made sense. It was really, really hard, and we’d only just started a looong journey to revenue, and had large tech risk still ahead of us. No regrets.

But selling “early” the second time, I think about it every day. I think about if we hadn’t sold EchoSign / Adobe Sign, and we now had, say 30% of a $2b market ($600m ARR, or even say $300m ARR). If we’d just kept going. (That was our market share at “exit”.)  If we were now running say a $3b-$5b public company, instead of having sold a pioneering product doing $1m a month in ARR growing 100% YoY with 140% net revenue retention to a public company.

Yes, it was a different time. And yes, so many headaches, so much stress was avoided, for still decent money. Plenty of money.

And yet … I’d give it back and up in a heartbeat.

You only get so many chances in life.

In SaaS, revenue compounds.

Let it.

At our first SaaStr event in 2013, some folks ask why we had a Mad Men-inspired theme. Well, you see this guy at the first SaaStr event, from 2013. He’s thinking. He’s thinking on this question. He’s been thinking ever since then on it.


Related Posts

Pin It on Pinterest

Share This