Guy sells his $50k/mo business for $10m but it's just an acquihire
Also so many stories like this
Guy sells his $50K/mo business to a VC funded unicorn
Gets offered $10M for it, e.g. 16x multiple on revenue!
Too good to be true right? Well it is, cause it's just an acquihire
Celebrates it as a massive $10M acquisition
"Look guys I made it! I'm rich now!"
His startup is shutdown, and he gets paid a salary to work at the new company, with a vesting agreement that he has to stay on for 5 years to get the $10M, but the $10M is in stock valued at the arbitrary price when he got acquihired
Meanwhile that $10M stock gets diluted, the price may drop due to the market changing, and actually it might just end up worthless after paying tax on calling the options to buy the stock in the first place
And now you have a soul-sucking job at a unicorn instead of building a cool product
And you're still poor
5 years of the best years in your life wasted for quite low odds % on a pay out
P.S. I'm on Twitter too if you'd like to follow more of my stories. And I wrote a book called MAKE about building startups without funding. See a list of my stories or contact me. To get an alert when I write a new blog post, you can subscribe below:
