I’ve been learning more about start-ups recently and have noticed a lot of them want to be acquired. Why is this? Could they also choose to grow their business?
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Acquisition is a fairly quick way for founders to exit the company and realize their gains. Growing a company, building operational experience, finding customers and markets, hiring and training are time consuming, resource intensive and require skill sets that many founders lack. A tech founder, for example, might want to spend more time developing new ideas and products rather than spending the next 3-5 years doing mostly corporate management duties to grow and sustain a startup through an IPO phase. (An IPO takes between 12-18 months to do. Lots of investor communications, regulatory filings and meetings with analysts, bankers, lawyers etc on top of the daily job of running the company. This can suck up a lot of top management time since many of these things can only really be done by the CEO and CFO.)
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