Paths to $5M for a startup founder

The problem with his logic is that it assumes that the desire to acquire a company is linear with revenue. That just isn't the case. I'm not sure who the companies are that are buying companies for $5M. I would suggest those are mostly talent acquisitions, which isn't putting $5M in the founders pocket. It's putting a $5M earn-out, likely with clawbacks and other provisions on the table. Very different. Not inherently bad, but it's not time to go to the beach by any means. The real work has just started in that case. I've done 7 transactions, which is a small number but way more than most folks. Two of those were asset purchases of dead companies. Those are the ONLY times we ever even considered a transaction under $10M. Most companies that can write those checks, or spend the equity, have no interest in "small ball" moves like that.

Let's put some #s on it. Suppose you want to end up with $5M (gross). Let's say for the moment, after all is said and done, the initial founders end up with 30%. If you have two co-founders (3 people) you'd need a $50M sale to end up with $5M, as you'd get 10% of it personally. With one co-founder, you'd need a $33M sale and with no co-founders, a $17M sale.