There is no right answer. Sometimes, you sell your company because a buyer comes along and flashes you the dream price that gets you to the magic number that makes you no longer want to work. Other times, you bring the company to an inflection point, you bring it to market, you have multiple offers or one offer, and you go with it. In less good times, you are out of gas, and you offer your company to a competitor, and they take it off your hands on their terms.
Timing is everything. If you bring your company to market when you are growing by more than forty percent, you will get a higher multiple of revenue than if you are not growing. If you bring your business to market when profitable, you can get an even higher multiple of revenue. What is the outlook for further growth in one, two, and five years? What is the expected obsolescence of your company’s core technology? What are the key players on your team, and are they bought in to go to another round?
It is often said that great companies are bought and not sold. While there is much truth to this statement, we have to deal with the circumstances as they present themselves. Remember that you will need sufficient cash resources and runway to make it through a marketing process while still operating a business. Plan for six months to a year, then hope for eight weeks once you have identified a buyer with interest.