Mergers, Acquisitions, Buyouts, they are all common terms, and usually when a company is acquired it is extremely beneficial for the owner, especially when we're talking a 7+ figure deal. But the reality is that you should never create a company and build it under the assumption that you will sell it. Operating under such a thought will eventually drag your company down or even drag you down at a personal level, financially and more.
Whenever entrepreneurs are under the assumption that a bigger company will come by, offer them a high valuation for their company and they will sell it, the tend to just pour money in blindly while they are operating the company. The also don't care about profits and cash flow through the company because they think that they have a "phenomenal product." While it is true, especially in the tech space, if you come up with a great product, chances are there will be a lot of offers on the table, it is necessary to keep things in prospective. If you just keep pouring your own money into the company and nobody offers to buy you out, then you will be in trouble because soon enough, you will run out of money and at a personal level, you will be struggling. It is a must to be wise when you pump money into your business. You also have to keep an eye on cash flow constantly. If you aren't making a profit, you should at least be aware of your losses.
There are times when company funds might be drying up and investors are willing to write you a check, buy you have to remember that each time you cash their checks, you are giving up a portion of your company. That said, taking the less money from VC's as you can, will probably be beneficial to you in the end. I personally believe, most that say that "Oh, we have the VC's money to burn through, who cares about making money," are foolish people.
Other times when entrepreneurs are under the assumption that they will just create a company and sell it for multiple folds of its value, they tend to just focus on the end picture. Any other partnership offers or deals that might pass them by, before there are any buyout offers will be ignored. I always think, it doesn't hurt to review offers, even if you are not going to accept.
Now lets say an entrepreneur has been running a company for five years, hoping for a buyout, but there are no offers on the table and they have been careless with the company. Chances are they are holding a rotten apple and each day it is getting worse. Any chance that there was for the company to strive and be profitable might be lost and eventually someone might just acquire the company for a "steal" leaving the founder with pebbles instead of boulders.
I feel that is it always beneficial to run a company as if you will run it forever. If and when the time comes that you are looking at a buyout, you will have two options:
1) continue to run the company because it is doing better than you expected and you planned to run it and not just sell.
2) sell the company because the offer is more than you expected or you feel that it is the right thing to do.
...not to mention that you will probably hate running a company if it doesn't sell.
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