I went through an exit. There are a lot of ways it can go wrong, but if it goes right, it can be good. If the deal is structured in such a way that there is mu

I went through an exit. There are a lot of ways it can go wrong, but if it goes right, it can be good. If the deal is structured in such a way that there is mutual incentive for the company being acquired to continue growing, the results can be good. The necessary ingredients are to incentivize the acquired company to grow and the acquiring company to invest. If it's structured as a one-time cash-out for the founders or a financial engineering acquisition for the acquirer, it's likely a net negative. Lets throw out some real numbers. Suppose "Small Startup" has $1M/year in revenue, is breaking even as far as expenses/profit, and is growing 30%/year. Bad Acquisition: Pay the Small Startup founders $3M for the company. Good Acquisition: Pay the founders $2M, and promise them 30% of revenue above $1M/year for the next 5 years. Also promise to invest an additional $3M over the next 5 years.