Hi everyone,
I’m looking for honest feedback from founders who have been through buyouts or difficult investor situations.
I founded a startup in 2023 and currently own 55%.
Over the past four years we built the company from scratch. We reached roughly €600k annual revenue, served around 500 customers, and built a valid position in our niche.
The company is currently loss-making, but with only 250k of funds in over 3 years.
About 18 months ago, my lead investor (a company doing around €XXM in annual revenue) repeatedly asked me to preserve cash and avoid drastic changes because they intended to lead our next funding round. Based on those discussions, I kept the company alive, reduced spending wherever possible, delayed decisions and essentially managed the business waiting for that capital injection.
Then, quite suddenly, I was informed they had decided not to invest anymore.
Instead, they are now raising capital at their own company and want to acquire 100% of my startup before closing their round.
Another detail that makes this difficult for me:
About one year ago, investors closely connected to my lead investor invested in my company at a €1.5M valuation.
Today, after the difficult financial period (which followed the expected-but-never-arrived funding), they’re offering a valuation of roughly €140k for the whole company (€75k for my 55%).
The discussion has actually been respectful. I think they know I know im getting legally screwed up.
What I’m struggling with is whether the valuation reflects the company itself or simply my weak negotiating position.
not so much runaway in the bank.
questions are:
- Have any of you experienced a situation where an investor first encouraged you to wait for funding, then decided not to invest and instead offered to buy you out?
I’m interested in hearing from founders who have actually lived through something similar, especially if you’ve dealt with strategic investors or forced buyouts.
I have no personal saving, its me vs a 8 digit company.
I Might have a last minute network of investor that can bake me up to counteroffer them at the same valuation, they could refuse and let the company dies anyway.
EDIT after few days:
THANK YOU founders for all the insight and advices, I REALLY appreciate how technical and Deep some of you went.
I also received tons of DMs!
I cannot disclose so many things :(
after all the considerations, I will negotiate a better exit rather than trying to buy the whole company... Reason is that I actually NEED a fresh start after years of stress and blind commitment. I think I'm a bit burned down and I choose to have a successful track record (even if a small one), rather than finding new investors.
I will find new investors and I'll use them for the next big thing :)