Having had a couple of companies acquired now, Be cautious in how you deal with any competitor that has interest in acquiring you. Not to say I wouldn't do it,

Having had a couple of companies acquired now, Be cautious in how you deal with any competitor that has interest in acquiring you. Not to say I wouldn't do it, just be careful, more careful the bigger the competitor is. The fact you are getting interest can be a few likely reasons, the most optimistic is you have hit on a real need and niche and people want to get in on it now. Another, competitors see you gaining some traction and they want to buy the traction not the product. And still yet, it could be they are wanting to kick the tires and learn what you are doing to walk away and repeat what they like. Of course there are other scenarios too, but just some points of interest. As for safeguarding against what a competitor wants to do all you can do is ask and get a feel for their intent, if you get to the point of due diligence you'll pick up on it quickly by paying attention to what they care about most. If they spend 80% of the time on customers and financials it is fairly obvious they are likely going to ditch the product, if it is more balanced than so will be their approach. Only you can decide what is best and what their intent is since you are directly involved. But I'd always talk to people, if nothing else you can learn something from them as much as they learn from you. Be humble, and don't try and be something you are not (advice I wish I'd listened to on my first sale), e.g. if this is your first time admit it, there is no weakness in that because it will be obvious to everyone anyway. And if you are humble and cautious it will actually give you good will in the transaction if you move forward. As far as acquired vs investment, it is really a personal decision again. Do what you want to do. I'd think that being acquired even at a decent multiple for a product doing 250k/year run rate you are still going to take home less than a million dollars most likely. Usually that is the first rude awakening to most people, they think they'll get a 10x or higher multiple when in reality most M&A for small business ends in far less than that, and many times winds up in an asset purchase agreement and not a stock purchase to limit liabilities. There are exceptions of course, and if your growth is off the charts then you can argue for a much better deal. But in the end, it has to boil down to what do you want to do? Grow it or sell it and get a nice start on savings? * edit: word clarification