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Joy and money
The first is that the founder no longer enjoys it. If going to the office has turned into drudgery and nothing keeps the founder awake at night with excitement, someone more engaged may do better running the company.
The second is an unreasonable offer. A company valued at 20 million dollars in its last round that receives an offer of 200 million is looking at life-changing money for a family.
The mission
The third is the mission. Picture a founder who wants to help people live longer, offered the presidency by the most credible company working on exactly that, with unlimited funding, resources, and go-to-market. Selling could take five years out of the mission.
Trouble and regret
The fourth is a business in trouble. YouTube faced a crazy lawsuit that threatened to end the company, and no venture investors would fund it, so a sale was what remained.
One test is whether a founder will regret selling if the company goes 100x over the next five years. A founder who wants to run the business forever turns down even the offers that would accelerate the mission.
Why did YouTube sell to Google?
YouTube was founded in 2005 and grew fast, but copyright claims from media companies hung over it. Google announced it would buy YouTube in October 2006 for 1.65 billion dollars in stock. Viacom sued Google over copyrighted clips in 2007, seeking 1 billion dollars in damages. Google's resources made it possible to absorb that kind of legal fight.
How can an acquirer speed up a mission?
A large buyer can bring capital, distribution, and infrastructure that a startup would take years to build alone. Instagram had 13 employees when Facebook bought it in 2012. Under Facebook's infrastructure, it grew to more than a billion monthly users by 2018. The acquirer also takes on costs such as servers and compliance that the startup would otherwise carry.
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