Two founders discuss startup valuation during acquisition talks. They argue that flexibility matters more than hitting a specific number, and that pricing too high scares away buyers before negotiations even start.
I always like to say our job@acquirer.com is to tell you what you need to hear, not what you want to hear in terms of valuation. So when you go to market, you have the correct expectations, so you don't price yourself out of an acquisition. It's one of the number one things I see with acquisitions. On closing, you scare away buyers. You ask too high of a price, buyers just can't get behind it, you aren't able to justify it. And before you can even have conversations about selling your business, you just never get even going.
So you said it best is that if you go and have the approach of being stagnated with listing, it's just not going to be a fun experience. You have to be malleable. That's the motif you'll really see us discuss today is being able to be flexible in the process. When you want to list at the very top, tip top, maximum, and say, hey, I'll negotiate down from there, it's actually usually not the best strategy. Getting your multiple right from the get go is crucial, really. Pricing at a way where you have a little bit of room for upward and downward mobility is typically the way to go.
The Buyers Who Made the Move: What They Bought, How They Did It, and What Happened Next
