• When the Economics (to Everyone) Exceed Your Magic Number. I don’t know what your magic number is. But you will. It may be $19 billion. It may be $1 million. The magic number isn’t rational and can’t be 100% explained on a spreadsheet. It is something that makes it all right. Sometimes there is no magic number. Which is great, too. OK that’s the easy part. The more interesting part is when NOT sell. My Learnings: • Do Not Sell If You Are At Scale and Have a Committed Team. This is pretty much it for me. E.g., in SaaS if you are at $10m+ ARR and growing nicely and the team is killing it -- just don’t sell. You don’t have to listen to me but once you are at Scale in SaaS, you can’t be killed. Why sell? Really. • Do Not Sell Because of the Competition, Unless They Are Truly Decelerating You and You Can’t Stop Them. There is always competition. Google threatens to kill you if you don’t sell? Whatever. They can’t kill you if you are growing. A hot start-up nipping at your heels? That’s the way it should be. As long as you can hit your plan, it doesn’t really matter. • Do Not Sell Because You are Tired. This is the dirty “secret” of M&A. If you look at a lot of successful start-ups that seem to get acquired out of nowhere ... that have traction, great customers, and all that there’s often a story. It’s called the “5 Year Walk of Death”. You get so tired after 4 years, then you stumble through the 5th, and then, you take an offer. Don’t let it happen. Bring in fresh blood, fresh capital, whatever it takes. I know of one top tier VC Fund that specifically targets founders after 5 years, makes crappy offers but with a lot of secondary liquidity. They know it’s a weak moment. My learnings. You only get so many at-bats. Money is good. Take it. It gives you options and makes you braver (maybe next time) but even if you can go do another start-up ... you can only do so many. If you have something real, something good, something self- sustaining, something unlikeable. (which is hard) then you did something magical. You brought something real into the world. Probably, don’t sell. Period. SAASTR.COM 15