I’ve had the unique privilege of experiencing both sides of the M&A table. As a founder who’s successfully exited multiple companies*, I’ve seen firsthand the thrill of a successful acquisition. However, as an investor, I’ve also witnessed the challenges and pitfalls that can arise when a team is building the company solely with an exit in mind.
*Xtreme Labs (acquired by Pivotal, which went public and was later acquired by VMware); Hatch Labs (parent company of Tinder, acquired by Interactive Corp (IAC)); Autonomic (acquired by Ford Motor Company)
Building a company should be about more than the sale
While it’s important for founders to consider the possibility of an exit, I firmly believe that building a company should be about the journey and accomplishment. A successful business isn’t merely a financial asset; it’s a living, breathing entity that should be nurtured and grown for its own sake. Ultimately, build a business with the intent and purpose of creating an everlasting entity.
The best way to sell a company is to be “bought not sold”
When it comes to selling a company, I’ve always held a simple principle: the only way to sell a company is to be bought. This means that a well-built, high-quality company naturally attracts buyers. It’s not about creating a façade or manipulating metrics; it’s about building a sustainable, long-term business that is valuable in its own right.
On the flip side, if you’re solely focused on an exit, you may find yourself building with vanity metrics in mind. These metrics might inflate your company’s valuation in the short term, but they don’t necessarily contribute to its long-term health and sustainability.
You have to build a business to be everlasting
Building a lasting business isn’t about quick wins; it’s about sustained, focused effort. As I’ve said before, “You have to build a business to be everlasting and grind through the work that it takes to do that.” By focusing on a strong foundation and delivering value to customers, you’ll create a company that not only attracts buyers but also thrives long-term.
Remember, building a business is like a rollercoaster. There are highs and lows, excitement and challenges. The key is endurance. When you’re working on something that’s growing; you’ll find energy; it’s when you’re stagnant that burnout can often set in. So, stay persistent, stay focused, and always ensure you have the resources to see your vision through.
Amar Varma is the co-founder and CEO of Mantle, a next-gen equity management platform built for modern founders, operators, and law firms. Register for Mantle today at withmantle.com/register.
