10 Years, 10 Lessons: Year 9: On the Way Down, the First Offer is the Best Offer

photo courtesy of jakerome

photo courtesy of jakerome

Just take it!

When you’re on the way down (you can smell death in the hallways) the first offer you get will always be the highest.  In a failing startup, you lose value quicker than a laptop.  Market sentiment writes off the brand and talent leaves. It can take months to complete due diligence, and months can be significant if cash burn is eroding equity, so take the first reasonable offer.  I know of at least one start up that sold 12 months later for a third of the first offer.

Key Takeaways: When you’re on the way down, sell to the first real bidder.

Sign Posts: How would you characterize the momentum of the company? Is the company for sale?

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