Three times a founder for which I negotiated the sale of his company looked a buyer in the eye at the final moment before signature and said, “No. Changed my mind.” No warning. No discussion. Just no.
Let me tell you three short stories.
The first was my very first early-stage investment. A music technology company that produced custom musical tracks using studio musicians, with software that let any user create exact-length background music for ads. I introduced the founder to Paul Allen’s Vulcan Capital in Seattle. We flew to Seattle to seal the sale of the company. Sitting in the waiting room before being ushered into the conference room, the founder turned to me and said: “I’ve decided not to sell my company.” The plane ride back was the quietest two hours of my career. I negotiated a 5x repurchase of my shares to the founder and moved on. The other VC who stayed on the board received nothing when the company later dissolved.
The second was a founder who had spent fifteen years building his company and told me he was ready to sell and retire.
[Email readers, continue here…] I arranged a good sale to a New York buyer, and the definitive agreements were prepared and ready for his signature in New York.
I tracked his flight from LA to New York, keeping the buyer’s attorney informed of his arrival time. What I didn’t know was that my seller CEO had invited his new girlfriend on the trip. She apparently talked him out of the sale sometime during that flight. The buyer called me from the New York attorney’s conference room to tell me he had arrived and refused to sign. I just listened to him and then to the buyer’s attorney, stunned, as another last-minute decision rewrote the outcome.
And a third story…
I had successfully helped increase the value of one of my portfolio companies and negotiated a strong sale to a well-known company in the same industry.
Three people in the seller’s conference room: the buyer’s CEO, the selling founder, and me. The founder looked directly at the buyer and said clearly: “I don’t want to sell my company.” No hint of this in conversations with me prior to the meeting. Yet I experienced again a familiar few seconds of silence. Then everyone stood up and left without a word. We did eventually sell that company years later, at the same price, to a different buyer.
What connects all three?
The emotional bond a founder carries for what they built: the late nights, the employees who feel like family, every hard-won milestone, is real and should never be dismissed. But it does not change the promise.
Entrepreneurs often forget that accepting investment capital is a compact. A promise. That someday, whether five or fifteen years later, there will be a liquidity event. That promise lives quietly underneath the excitement of the funding moment, rarely spoken aloud, and sometimes forgotten entirely.
These three experiences changed how I invest. Now, before writing a check, I ask every founder directly: do you understand that taking this investment means there will eventually be time to sell? That the board will help guide that process? Is the compact sacred?
Taking investment is making a promise. One that matters as much on the day of the exit as it did on the day the check was signed.
