So often a CEO will aggressively raise as much money as possible. This SaaStr article argues against the need to do just that because of the importance of taking exit valuation into consideration and how a bigger valuation may hurt a company’s chances at being acquired.
Key Takeaways:
- Assume when you raise money that you must raise 10X for an exit.
- Big companies look for “tuck-in” opportunities so raising too much capital could hinder your chances to be acquired.
- For many companies, IPOs may be the only option for exit.