It depends on the type of "sale", but for most company sales, the acquisition isn't exactly like jumping out of rocket as it's taking off. (Where you wouldn't c

It depends on the type of "sale", but for most company sales, the acquisition isn't exactly like jumping out of rocket as it's taking off. (Where you wouldn't care if it makes it to space or not, because you've got your bag of money.) It's not atypical for every investor at every stage to have to sign something like a 180-day lockup for their stock in the event that an IPO takes place, meaning that no large holder can just go sell everything (which would drive the price way down) for at least 6 months after an IPO occurs. So in the IPO case, which is probably what Fred encourages his companies to shoot for, even the VC's need the company to last a good, long while. For smaller acquisitions, it's possible that everybody gets instant liquidity, but the founders will always have to hang around at BigCo for a while to make sure the transition is smooth, and most M&A deals probably have vested stock that requires certain growth numbers are met (somebody please correct me if I'm wrong here). In that case, this is good advice for the founders, because 1) life will suck if BigCo doesn't treat you well and 2) you have a financial incentive to make sure things keep going well. The other case Fred refers to is for a company that is still growing, and doing a financing round, not an acquisition. For a company to ever have a "B" in it's valuation, it probably will have to do multiple large financings along the way, so everybody is in bed with one-another for years.