When should a founder consider an acquisition?

Chris Nguyen / June, 2018

Description

Chris Nguyen, CEO, and Co-Founder of LogDNA is currently building his third tech company in which one of the previous ones got acquired. In this video, he shares when a founder can or should consider an acquisition.

Video Transcript:

When should a founder consider an acquisition?

The best time to consider an acquisition is when you don’t need to sell. My first company ending up getting acquired 17 months after launching. This was back in 2007. The best opportunity was that we were not looking. It was an opportunity that we could join another company who were doing a roll-up strategy. We knew that our forces together were much more impactful and our synergies together were more impactful.

It was a fun time because when you are not looking to sell you have all the options. We were in the right place at the right time.

At the time, when we sold our first company we were only 5 people. Here is a company that comes along and they are 500 people and you just look at the order of magnitude of resources that can be deployed with our vision. They saw our vision and they saw how amazing our technology was, but most importantly they saw our talent, that we would be a great fit for their organization. It was a great experience even to work with them.

It was a tough decision, we took a step back ourselves to say is this the right choice or right move. We were young at the time. It was a great learning experience because we wanted to acquire more skill sets and knowledge that we didn’t have that only makes us stronger along the way and along the journey of being a founder.

If it wasn’t acquisition our great option was to raise more funding. We had an opportunity to raise more funding where we hit that inflection point – Do we raise funding or do we go for the acquisition? At the time we were 23 years old, it was the best option for us. We all believe it was the best for us. It was never about the money. It was more about the experience that we get with it! That was one of the main factors that we look at.

We were still young in our career but what can we learn through this acquisition. We saw their vision, we believed in their vision. It was an amazing experience in terms of the knowledge set we learned from a business development perspective, finance, product development, project management, technical execution, scaling, all these things were a crash course like taking your mini MBA the moment we got acquired.

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