There may be a conflict of corporate purpose. Public shareholders view their stock holdings primarily as a financial investment. As long as the stock does well, they don’t really care what the company is doing. Thus, if your purpose is not strictly to maximize shareholder wealth, you may be at odds with your shareholders. Public shareholders don’t generally buy into a vision; they buy into the prospect of a capital gain.

4.3. Marrying for Money

“Once you understand that, you can think through whether you have a business that investors will want to invest in. It’s not a given that your company is right for venture capital. Most big VCs are surprisingly risk averse—they won’t invest in startups that can’t prove they’re already on a clear growth trajectory. VCs have been trained by the internet age to expect numbers before they invest: growth rates, sign-up rates, click-through rates, unsubscribe rates, run rates, all the rates. And VCs have bosses to report to—their LPs, the people and organizations who give them money. They need to show that they’re making wise, highly profitable investments with the right management teams.

In any case, it’s hard to generalize across an entire firm. It usually comes down to individuals. Just like everything else.

So when you reach out to pitch an investor, make sure you’re reaching out to the right person. Talk to founders who have worked with the VC in the past—who’ve gone through tough times together—and find out which partner is operational and helpful and smart and which only cares about the money.

Anyone will tell you that software acquisitions are risky. The asset you’re acquiring is human. If the critical people decide to walk (and a lot of them would certainly have the financial wherewithal to do that once the deal closed), then you’ve spent a lot of money for some buildings, office equipment, and access to a customer-installed base.

It is one of the big benefits of being a private company. When I first bought these lands from major oil companies, they were looking ahead one quarter or one year. They wanted to get the assets ‘off their books’ to make their financial ratios look better. We can do more with these businesses because we don’t suffer the crazy pressures that are put on a public company.