Start-Up Leaders Recall Choice to Cash In or Stay Independent | Pitch it! |
Nine start-up founders recounted the moment they had to decide whether to sell or stay independent — when the money was on the table and the future was unpredictable.

The reactions last week flowed like those to a Rorschach test.

Were the young founders of Snapchat, a mobile-messaging start-up, delusional for turning down a multibillion-dollar buyout offer? Greedy to think they might get more later? Or courageous to chase their dreams?

The decision they faced — to cash out or remain independent — is one that all successful technology entrepreneurs eventually confront. The founders face cold business considerations: pressure from investors and workers who want liquidity, and complex calculations about timing in a dynamic industry. But the choices also involve ambition and exhaustion, competition and loyalty, dreams and reality.

The successes get the attention. But Silicon Valley is littered with stories of companies that gave up money by rejecting offers and of those that sold too early. “It’s never obvious whether to sell or hold,” said Ben Horowitz, of the venture capital firm Andreessen Horowitz, an early investor in Instagram, which was co-founded by Kevin Systrom and sold to Facebook for $1 billion. “When Kevin sold Instagram, people said he was a genius, and now they’re asking whether he did it too early, and they’re saying Snapchat is so bold,” he said. “Who was right? We don’t know yet.”

When Snapchat’s founders rejected the buyout offer, it conjured memories among start-up founders who once faced a similar decision. Nine recounted their thoughts in that moment — when the money was on the table and the future was unpredictable.

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Via KAGEMUSHA Capital, Marc Kneepkens