While the best startups are doing well, even in this tough venture capital market, others are struggling to raise new funding. If they can’t raise and haven’t become self-sustaining businesses, their best bet is to get acquired, even if it’s for a fraction of their last valuation. The alternative would be to run out of money and shut down.
Such acquisitions may feel like a huge disappointment for founders and senior employees. They were dreaming of building a massive, highly valuable company that would make them rich. Instead, their equity could be worth little to nothing, they may have to take a role at the acquiring company, and they may even have to commit to work there for a period of time to get their full payout.
But selling under such circumstances is often not as poor an outcome for founders and key staff as it initially seems.
Dispatches From The Front 