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“There’s a company in our portfolio, I can’t say who, where the founders decided to sell to Microsoft,” one of my investors, Gill, said to me.
“Congratulations,” I said.
“Well, they decided to sell a little earlier then I would have preferred, but they are the founders, so they get to decide (when to sell),” Gill responded.
You have incredible power when you are the founding CEO.
Gill was a seasoned investor. His fund had invested in hundreds of companies with many successful outcomes. However, he was relating a reality of the leverage founders have when it comes to startups.
Yes, Gill felt that the founders were selling out too early. There is an exception to this, and I’ll get back to it later. Yet, it was their decision, as the founders, to make, not the investors.
The last thing investors want is an unmotivated team.
Gill and I had that conversation over ten years ago. Since then, venture investing has changed.
Companies are staying private longer, and investors are pouring more money into successful portfolio companies. The goal is to make even more money as the valuation of the company rises.
