You have three months of cash left. A strategic acquirer is circling and sending strong 'buy' signals. They tell you how much they love your product and talk about moving fast.
You assume a term sheet is imminent, so you decide to delay your painful internal bridge round. Why suffer so much dilution and layer on new preferences if you can get a deal done now?
You delay layoffs to avoid signaling weakness.
A couple of weeks go by. The potential buyer signals concerns about valuation based on your last funding round. The diligence process slows to a crawl.
Then the buyer goes quiet.
You debate whether to chase their corporate development team, but you hold back because you don't want to look desperate.
Meanwhile, your current investors are having second thoughts on the bridge round.
You're stuck in limbo while your bank account drains.
Founders fall into this trap because they trade hope for strategy.
M&A deals take months to close. Strategic buyers have zero urgency. Worse, savvy acquirers will intentionally drag out the process to shorten your runway to increase their leverage.
Waiting for a buyer to save you guarantees a fire sale. Extending your runway is the only way to rebalance the leverage to secure a fair deal.
Here is how you break the waiting game trap and take back control of your startup's destiny.
👉 Close your bridge round immediately
Draft the documents today and send them to committed insiders to force momentum. Close the round before you start deep M&A talks. Be prepared to accept terms that reward investors who participate. Keep everyone focused on the alternative, a wind-down where no one wins.
👉 Cut once, cut deep
You need at least nine months of runway to survive a competitive sale process. This ensures you have time to run a process, negotiate a deal, and still have cash in the bank if the process falls apart at the end. If you need more runway than a bridge round can provide, cut staff and expenses today.
👉 Turn your extended runway into a competitive process
Now that you have cash in the bank, take the time to rethink your exit strategy. Create a short list of other potential suitors and spin up a process to create a competitive dynamic, even if only to bring the original buyer back to the table.
Fundraising and exits are like home improvement projects. They take twice as long and cost twice as much (i.e., lower valuations and higher preferences) as you expect.
Don't fall into the trap of assuming this time will be different. Don't pause a bridge round or restructuring for a potential exit that showed up on your doorstep. Stop hoping for a fast deal. Secure your runway. Reclaim your leverage.
Whenever you are ready, here is how I can help:
🖥️ Work with me: I help founders take charge of their startup's destiny. See my services here.
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