I think this post provides a very good synthesis of what to keep in mind when talking about exits in the startup world.
For the past few years there has been a focus on unicorns, and on a few companies with exponential growth and seemingly endless financial prospects.
It is good to remind ourselves of the reality: these cases are extremely rare. The article evokes an interesting statistic: 97 percent of exits are M&As (2016 statistics), most of them occurring even before round B.
Another noteworthy point, which I myself have experienced through two exits: startups are bought, not sold.
It is important to understand how M&A works and how to prepare your company for an acquisition.
This article is highly recommended to get a relatively complete picture of the subject and understand the possible options, and how to make them available to your startup.
You invest a few years of hard work to build something of value. One day you receive an acquisition offer out of the blue. You’re elated. And you’re not prepared. You drop everything to focus on this opportunity. Exclusive due diligence starts. Your company is a mess (IP, contracts, burn). Days become weeks; weeks become months. You’ve neglected business and fundraising. You’re running out of money. M&A is now your one and only option. The buyer says they found a bunch of cockroaches in the walls and drops the price. Now what?