Companies Are Sold

Shaan Puri shares his experience selling multiple companies and believes most companies are sold, not bought - contrary to the popular saying "great companies are bought, not sold." Unless you're Instagram-level successful, you'll need to actively work to sell your company.

Key Points:

• When to Consider Selling:

  • When you get a great offer
  • When you no longer believe in the business
  • When you don't want to run it anymore
  • When you prefer to exit versus hire an operator

• Psychology of Selling:

  • Managing your own psychology is the #1 most important thing
  • Be careful about discussing the sale with team/investors too early
  • Only discuss with cofounders initially
  • Create a communication timeline for different stakeholders

• Potential Buyers Fall Into 4 Categories:

  • Unicorns (high growth companies)
  • Dying dinosaurs (incumbents needing fresh blood)
  • Adjacent alligators (peers/competitors)
  • Talent farms (companies just wanting talent)

• Key People in the Deal:

  • Executive Champion (person who wants the deal to happen)
  • Company Router (usually corp dev, connects you to right people)
  • Deal Doula (trusted advisor who's done M&A before)

• Strategic Reasons Companies Buy:

  • CEO finds it interesting
  • New executive needs to demonstrate big moves
  • Trying to catch up to competitors
  • Synergy (1+1=3)
  • Fear of competition
  • Access to unique talent

• Deal Making Tips:

  • Frame yourself as the solution to their problem
  • Do the work for them (write memos, create presentations)
  • Run multiple conversations in parallel
  • "One choice is no choice" - need multiple potential buyers
  • Maintain deal momentum
  • Remember deals commonly fall through
  • Don't burn bridges - rejected deals can come back

• Sales Process Best Practices:

  • Package your story as solution to their specific pain points
  • Talk to founders previously acquired by same company
  • Make buying your company as frictionless as possible
  • Sprint hardest after getting term sheet
  • Always celebrate the win