Why I Sold My Startup Instead Of Taking VC Money
In this 2012 acquisition retrospective, @tallross reflects on the journey of bootstrapping and successfully selling their business.
Core Principles for Independent Builders:
Unsolicited buyer inquiries versus running a deliberate auction process require very different negotiation leverage.
Bootstrapping for years without external capital provides extreme freedom, but exits are often triggered by energy depletion as much as financial gain.
Retaining ownership of code and operations creates pride, but transitioning to an acquirer requires letting go of absolute autonomy.
Community Debate Themes:
Hacker News peers debated transaction structures (cash vs earnout), founder tax strategies, and life after liquidating a long-term indie asset.
CATEGORY Startup Exits →
HISTORICAL ERA Web 2.0 Genesis (2007–2013)
COMMUNITY SCORE ★ 189 points
TOTAL DISCUSSIONS 54 comments
Congratulations... Having gone through a very similar situation I have to say it was the best decision I've made. I sold my first company for less then I could have had if I would have taken the "chance" of going the VC route... but what that enabled me to do (as you have mentioned) is to pay off my house and put a descent chunk of money aside. Most importantly though, it gave me the freedom to try new things once I decided to leave the company that purchased us. Instead of looking for a salary that would pay my mortgage, put food on our table, and pay my monthly expenses (e.g. 100k +), I could manage well on a salary of 35-40k.
Bottom line, for me is that financial security makes me sleep well at night.
My original startup also gave me insight on what I loved to do in a startup and what I didn't love. I personally joined a startup as employee #1 and helped grow the company to where we are today.
I know MBAs get shit on a lot around here (and I am not one, but close) this really is a simple expected value proposition. Something an MBA is introduced to early.
On the one hand he can sell his start up for a thus undisclosed amount of money, on the other he can continue on and have some expected payout (could be 0 could be a lot). If `expected sell amount` 2 million) we could deduce a lower threshold for what he sold for assuming the above behavior... but really he did what was best given the circumstances...
Congrats
Thanks for this Ross. Its always an interesting choice (and its good to have a choice!) I recall when my CEO got an offer to buy the company in the late 90's and turned it down because he was fixated on going public. Even later it wasn't clear if that was the 'right' financial choice or not, but as a VC funded company it really drove a wedge between him and the board. That was a really high price to pay.
You didn't mention the size of your team at the time of the sale, was it just you? You and a co-founder? How did they feel one way or the other about the choices?
Congrats! You must be on cloud 9. I think you made the right choice.
Any advice to someone trying to setup this kind of platform in another country? I've been trying to do this in a market that lags far behind in this type of lead generation. I don't have the skills/resources to build a backend from the ground up. Is there a solid, basic software package out there? Would CraftJack ever license its platform to other markets (countries)?
I worked for a company in Australia that sounds like it does something similar (lead gen for tradespeople). I'm curious how you made the transition from national brands/affiliate model to the direct-to-suppliers model (as mentioned [here](http://news.ycombinator.com/item?id=4854030)). If you'd rather not discuss here, my email is in my profile.