Should you start a business with the goal of being bought out?

On Behalf of | Nov 26, 2021 | Uncategorized |

Most people who start a new business aim to grow that business as large and successful as possible. They may bank on its success for their retirement plan. 

When you hear stories about bigger companies coming in and buying out smaller businesses, you may immediately assume that those business owners have given up on their plans for the future. But is there a situation in which you would start a business with the goal of being bought out by another company? 

Creating a disruptive technology 

This is certainly something that people do, and it can be an excellent way to increase your financial earnings quickly. For instance, you may develop a disruptive type of technology that is a threat to a prominent, large corporation. If they identify your company as potentially problematic for their operations, they may agree to buy you out merely to keep you from competing with them in the future. The value to them is going to be much higher than it would be to any other buyer. 

Another option may be to start a company that provides an adjacent service or technology. You know that it’s going to work well with another major corporation in a similar space. But the goal is for that company to merge with yours or acquire yours, giving them access to your technology so that they can make use of it with their larger sphere of influence. 

If you are selling your company, make sure you know what legal steps to take. You do not want to make any mistakes with so much money on the line.

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