Mailgun’s Advice on Startup Acquisitions

blog.ycombinator.com

You have to be very honest with yourself as a founder. Are you building to sell, or are you building to dominate? Because if you fail at becoming a dominating monopoly, then an acquisition will be more about accepting defeat and minimizing damages. Looking back, it’s clear that from the beginning Mailgun was built to be acquired. We did not see how it could ever become a billion dollar business on its own. So you have to be at peace with the fact that your product will eventually be owned by another company. We just had to find a good candidate that shared a lot of our values and we did. If you don’t, all the other stuff — like term sheets and negotiations — become a nightmare. One mistake that we made was not getting our investors involved early on. We would have saved ourselves a lot of time and money if we had brought them into the conversation.

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