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The Case for an Early Buyout

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This story appears in the August 2013 issue of Entrepreneur. Subscribe »

I know everyone dreams of being the next Mark Zuckerberg, fending off huge buyout offers on the way to becoming a billionaire. But the faster alternative--being acquired by a bigger company early in your venture's life cycle--is a sweet deal in its own right.

Case in point: Mobile e-mail manager Mailbox was acquired last spring by file-sharing service Dropbox for a reported $50 million-plus in cash and stock, a mere one month after the Mailbox app was made available to the public. The 13-member Mailbox team is continuing to build out the app as its own product under the Dropbox umbrella. In acquisition terms this is a win-win: They enjoy a nice payday and get to work on a product they're passionate about. Plus, they no longer have to worry about cash flow and can instead tap into the financial and operational strength of their parent company.

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