Are You Building a Company to Stay, or Building to Sell?

By Carol Tice

They say there are two kinds of entrepreneurs. One kind is building a company to sell it off and make a bundle, quick as they can. The other kind is who're building a company to work at until they retire (if they ever do).

Serial entrepreneurs are clearly in that first camp -- they're in love with the startup phase. They love creating something from nothing. Then, once it gets past that first big growth spurt and switches into cruising mode, they're pretty quickly bored and want to move on. (These are the entrepreneurs who fuel the popular theory that entrepreneurs have ADD.)

Many people point to Craigslist founder Craig Newmark as an example of the second type -- he's frequently said he's in it for the long haul.

But I have to say after nearly 20 years talking to small business owners, I think there are more types than two. Sure, the serial entrepreneurs are easy to spot.

On the other hand, I think plenty of entrepreneurs start out in love with their company. They can't imagine ever going anywhere else. Then, things change in their life -- they adopt five kids, their dad gets sick, they turn 50...and suddenly they view the business differently. They want more family time. They want to climb mountains while their knees still work. Now, they're ready to sell. In some cases, they look hard to find just the right buyer, who they feel will carry on in the spirit of what they've started. But they sell.

Still other entrepreneurs end up selling after being backed into a corner by partners or investors who become stifling to the entrepreneur's creativity. That's what happened to Tony Hsieh, whose new book Delivering Happiness, tells the story of why he sold hot ecommerce brand Zappos to Amazon.com last year. His dream had been to keep Zappos as a stand-alone company and take it to an IPO, retaining control and staying at the helm all the way. But that isn't how it worked out.

The company took on too much venture capital money, and ended up with a board dominated by VCs. They didn't necessarily care for Hsieh's passion for cultivating a relatively expensive (for ecommerce) culture of high customer-service levels. Eventually, he concluded he'd have more autonomy working for Jeff Bezos than he did operating Zappos as a stand-alone company.

So he sold.

One recent company sale that I think shocked a lot of people was Peter Shankman's sale of his hugely successful, $1 million-plus online service business that connects reporters to sources, Help a Reporter Out. Man, that guy was making that money just sending ad-supported emails to PR people on autopilot! He was working that four-hour workweek Tim Ferriss keeps telling all of us we should be achieving. He was an entrepreneurial media darling, popping up everywhere, admired, making great money. Who didn't want to be him?

But he sold, in June, to online PR giant Vocus.

I think Peter is a third type of entrepreneur -- the accidental kind. He relates on his blog how he started HARO as a Facebook group, with no idea it could grow into a powerhouse business. He just wanted to help reporters more easily find sources. Accidental entrepreneurs don't necessarily bleed financial statements. At some point, they're ready to kick back and enjoy life.

What type of entrepreneur are you? Are you in it to sell, in it by accident, in it to stay? Leave a comment and tell us. We promise not to rag you if you change your mind about what type you are in a few years.

Photo via Flickr user volpelino