You’ve made it as an entrepreneur. Your startup has positive cash flow, proven growth, and a strong management team. What’s next? No problem, you say. Just sell the company for big bucks. Easier said than done. Here are the things you need to think about before considering acquisition. Decide what you want. Yes, what you want. Do you want to remain in charge of the business?  If so, you need to tailor your discussions and the selection of venture partners to focus on the benefits of you remaining in charge. Show why it’s a better business with you at the helm.  Or do you want to maximize the cash you can take out of the business so you can move on to your next idea?  If this is your objective your strategy will need to focus on how a transition (you leaving the business) can add value to the acquirer.  I’ll add a third choice, in between stay in charge and maximize the cash. I imagine you’ve figured it out. Control and cash; there’s a trade-off between the two. There’s a spectrum; a series of choices. Create leverage. Once you’ve decided where you fall in the spectrum, figure out who has the leverage. Obviously you have leverage because you own the business. But think about the acquirer’s leverage. They are where the cash is coming from. Never forget this principle: no matter how good of a guy or gal you are or what a nice guy or gal the acquirer is, you are in a tug of war where leverage is the key.  Leverage is elusive. It moves around; it shifts; it’s a state of mind. You don’t have to sell your business. The same can be said for the acquirer—they don’t have to buy it.  If you’re a difficult seller, the buyer might walk away, shifting their attention to another opportunity.  If the buyer pushes you too far, you can just say no. How do you create leverage? The more you have the better positioned you are for a negotiation.  Leverage begins with the quality of your startup.  It starts with the strength of your market and how unique your product/market fit is.  Is IP important? If it is, do you have a protected IP position?  Do you have a strong management and advisory teams?  Do you have access to capital or are you close to running out of cash? Layer in equity partners. Many entrepreneurs don’t want equity partners. I think that’s a big mistake.  Grants and awards are the utopia usually followed by convertible debt. That’s a great place to start. But what you really want is committed equity. Equity partners can help make you successful.  Think of building layers of equity partners. Your first layer could be an extension of family and friends but a better move would be to add equity from the entrepreneurial network, investors who bring connections.  The next layer should be from the professional investment network, investors who see a lot of different start up companies. Their investment provides validation of what you have accomplished with your startup.  This is a good place to remind you of the hard truth of being an entrepreneur: if you can’t attract equity investors you’re not ready for primetime. There’s a parallel to a long-standing principle that the most difficult sale is the first one, without the first sale you don’t have a business. If you can’t attract equity, you don’t have a scalable business. The good news is you don’t have to have a scalable business to have a good life-style business and a good life-style business may be just fine for you. Approach acquisition like a business process. I see a lot of startup presentations with a slide on their exit strategy noting potential acquirers like Google and Facebook.  I don’t pay much attention to this. Not only is the exit is a long way off, but the odds of having a Silicon Valley company pay millions for your startup are probably the same as winning the lottery. Identifying the best acquirer for your startup takes time and focus.  This is one of the issues you need to address up front.  If your startup requires your full attention, you will not be able to lead a good “sale” process.  If this is the case, you need to have strong leadership on your advisory team linked up to your management team to organize your sale process.  This is also where those equity partners can be a real plus for you.  If you’re going to be successful in creating an exit strategy, you need to work at it, just like any another business process to manage. Oh, how we hate to talk about business processes, but if you’re going to be successful you need to. You concentrated on specific and focused pieces of your startup to make it the success that it is today. Now you need to spend that same energy organizing your approach to acquisition.