The communication that can save money for your investors and produce a better outcome for your company

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If you raise a problem, will your cofounder bite your head off?

You probably saw it reported a few months ago: another sale of a successful SaaS startup. The price was undisclosed, of course. But there was lots of happy talk about how excited the founders are to be joining forces with the buyer, and how great the combined business is going to be for their customers.

What you won’t know, unless you are one of the startup’s investors, is that this declared triumph hides a failure — one that’s all too common, and has lessons for founders of many other startups. Because the selling price wasn’t what you imagined: actually, the company went for barely one-quarter of all the cash that had been poured into it. So while the VCs in the most recent funding round got most of their money back, all the earlier investors got a big fat zero. And the founders who flogged their guts out to make it a success (let’s call them Gordon and Ajit)? Their shares were worth nothing. …

About

Tim Jackson

Startup founder, former Economist and FT journalist, CEO coach, and seed VC at www.walking.vc

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