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Comment by blacksmythe | Hacker News Reader

  >> When you sell too early you don’t realize the full potential.

For every company you can find that sold too early, I can probably find 10 companies that had a good chance to sell that they should have taken.

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The company that sold too early probably lost out on more than the ten companies that should have been sold, combined.

But how do you know? I know on hindsight a lot of companies that peaked about the time of their offer. Soon after the investors realized that the potential market wasn't as big as hoped and they pull. (some of the companies still exist, they serve their niche well which makes for some profit and keeps a few people on the payroll)

General economic principles? There's typically a risk premium for things. If a company is worth a billion dollars 10% of the time and nothing the rest, it's fair market value is typically under $100M.

That, and there's a power law distribution of start-up results. The majority of returns come from the minority of companies that end up doing really well.

That isn't the question I meant to ask. What I mean is say you have a company and get an lower offer now. Should you take it? (assume that maximizing money is your goal) If the company is at the peak of course you should, it isn't the big offer you hoped for, but it is the best you can ever get.

There are a lot of startups that fail. Then there are a fair number that do okay, but never really get big. Then there are a tiny number that gets big.

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