Then culture struck again. With Bizo for Multi-Channel Nurturing selling very well in the summer of 2014, we made the decision to sell to LinkedIn. Perhaps the decision was counterintuitive, but our culture told us it was the right decision. Deciding on the right time to sell is not an easy one. Many start-ups have left millions—even billions—on the table by selling too late or by completely missing the opportunity to sell.
There are a number of factors involved in deciding to sell, including the mind-set of the team and how excited they are to continue to work hard and to build the company. However, the decision really comes down to the business opportunity as a stand-alone company versus the opportunity as part of the acquirer.
You have to weigh what value you are getting for the business, compared with its "fair market value." And you have to assess how good the cultural fit is and if your current employees, who helped build a fantastic business, will have an opportunity to thrive at the new company. In my opinion, if the cultural fit isn't there, the value the acquirer would have to pay, relative to "fair market value," is significantly higher. Similarly, if the opportunity for growth within the new company isn't there, what the acquirer is paying would have to surpass "fair market value."
But if both the cultural fit and opportunity is there, it might even make sense to sell at or even below "fair market value," depending on market considerations, including the financing climate and balance-sheet strength.
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We ultimately sold to LinkedIn in large part because we believed that the platform and the brand provided a huge opportunity for our products to reach even more marketers and to reach them faster. We also felt confident that we would be successful at LinkedIn because of how closely our cultures matched. If the cultural fit is strong, there's a much higher likelihood that the acquisition will be a success, because the "host" company won't reject the foreign body.
Of course, the business reason for the deal is also a huge factor in the potential success of an acquisition. If the deal is pursued thoughtfully and resourced appropriately, there's little reason for the acquirer to want to shut the business down, because it is value-accreditive to the acquirer. There's always the risk that the rationale was either wrong or runs up against market changes, but those risks also exist in staying a stand-alone company.