When should you sell or shut down your company?

One of the questions I get most from founders is: Should I sell my startup? 

Here’s the video in case you don’t feel like reading a long blog post.

tl;dr version of the video:

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1. You should sell your business if you’re tired, bored, or resentful of having to come to work every day.

2. You should sell if someone gives you an offer that is irrational. Which is to say, an offer that is greater than the actual value you put on the business. There is nothing wrong with taking money off the table.

3. You, or your partner(s), should sell your company if you are having irreconcilable differences.

4. You should sell a small part of your business (say, 5 or 10% of shares), if your startup is crushing it and you want to diversify–or simply need some cash to buy a home.

What thoughts do you have on when to sell your business? Please add comments below and I will respond to every one.


Update 1

Chris Dixon makes a good point here. If you are going to sell because you’re burnt out or bored (or for any reason), you should do it in a classy and transparent way.

While I don’t think folks should simply give up when they are bored, especially if they have raised a ton of money and built a great team, the truth is many folks get disengaged from their businesses. In these cases they really should think about handing over the startup–specifically for the sake of the investors, customers, and the team.

I’ve seen bored CEOs let their businesses go sideways, when they would have been much better off selling or changing leadership. I think most folks do this out of a misguided belief that they’re not replaceable. Truth is, there is almost always someone more qualified than you to run your business (unless you’re Elon Musk, Mark Zuckerberg, or Steve Jobs).

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