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First world problem: "I can't get acquired because my valuation is sky high!"

Just sell for less. If everyone else demands high valuations, it's easier to sell, not harder.



Just sell for less

Your investors gave you $50 million at a $500 million valuation. Google wants to acquire you for $100 million. Your investors may not let you.


That's a nice position to be in. Disolve some of your shares: investors take $70 million, you take $30 million. Everyone should be very happy.

Or if you still have runway and believe in the business, keep going and raise that $100 million.

It sounds like the problem of having scaling issues: it's a problem, sure, but it means you're already a success. If you never got that $50 million to begin with because valuations weren't high, then you might be a failure now instead.


That's a nice position to be in. Disolve some of your shares: investors take $70 million, you take $30 million. Everyone should be very happy.

Be sure to check your term sheet. It could be that your investors have a liquidation preference that includes a multiple. Based on my (admittedly limited) understanding, if your investors gave you $50 million for 10% of the company, with a 2X multiple liquidation preference, they would be entitled to the first $100 million of any sale, plus 10%. So you may be able to sell for $100 million, but you wouldn't see a dime.


"I raised too much money!"

Or you can cancel some of your own shares and take the $50M.




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