There is a telltale sign of an inexperienced startup entrepreneur. They get premature merge elation. You know, they get so excited about doing deals all the time instead of doing the hard work of figuring out their businesses. I understand this. I was a premature merge elater once. Here’s what I learned:
1. As a startup you shouldn’t
focus on buying other companies until you’ve figured out your own
business
A close friend of mine in LA who is 3 years into his startup
called me about 2.5 years ago and told me, “I just got offered the
chance to buy this company because the founder doesn’t want to continue.
It has awesome features that my main competitor doesn’t have. I can
save tons of development time and I think I can buy it for all equity.
How much dilution should I take for it?” My friend’s company was
pre-revenue.
Me: “Zero dilution. Pass. Focus on your customers and don’t obsess about deals or keeping up with your competitors releases.”
To read the full, original article click on this link: Beware of Premature Merge Elation | Both Sides of the Table
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