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Fremont: Groupon snubbed Google's $6 billion purchase offer, Dropbox denied $800 million acquisition by Apple, Foursquare refused Yahoo's! $100 million offer, Mashape refused to be acquired by both public and medium size companies, Zuckerberg turned down $1 billion deal of Yahoo!, and Twitter turned down a $10 billion offer from Google. Are these companies making the right move at the right time? Are they not going to encounter bigger problems in the future? But what if something happens like Myspace that refused a 412 billion acquisition cost offered by Yahoo!? The company was later sold to an investment group for just $35 million.
With companies denying such huge acquisition costs, the reason behind this move is their CEO's strong believe in their ideas, products and business models. Few of them denied selling their company because they thought that they have not finished with what they want to do. With the current trends that prevail in the Entrepreneur environment, we can find many companies denying acquisition as it provides them the opportunity to continue to operate as an independent entity.
Mashape raised $1.5 million in seed funding after refusing to be acquired, just because they have strong believe that their product is going to be a huge success in the market by creating a vast demand for it. Creating a business is just like giving birth to a baby and you wish to take care all your life. However, it is more important to focus on the internal issues, such as product development, R&D, clients and management, and keep a track of the market for the past and the future for the survival of your baby.
Sometimes it is wise to get acquired by a giant on the right time for the getting good return for what you hold. Or else, you will be another Myspace. Deciding on when to get acquired and by whom depends on the management of the company and the situations guiding the business. With huge challenges to sustain in the industry, few entrepreneurs sell their company in order to start afresh with a new idea that he feels will provide him more benefit then the existing one. Some entrepreneurs have the strong gut feeling to go for IPO and they snub such offers.
You sell or you don't, the important thing is to identify your variables for competing and fairly analyze them against the risk-free alternative of a sale. Sometimes, too many founders let emotion and ego cloud a decision that is really a number crunch of profit. At that point of time, it is wise to sell the company, as it becomes difficult for it to sustain. And if you get a wise price for the job that you have done, it will be intelligent on your part to sell the company and move ahead to create another.
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