When a startup is too risky or not for sale, enterprises may invest in it to gain a stake in potential future upside. Key Considerations for Founders

Buying a proven startup is often faster and less risky than attempting to develop new, disruptive products in-house.

A startup that has found "product/market fit" has already proven its value, making it a lower-risk investment than attempting to invent a new product from scratch. The Mechanics of Startup Acquisitions

Founders should focus on building a sustainable business rather than aiming solely for an early exit, which can result in a lower payout.

Large companies are often better at extracting value from existing products rather than creating new ones. Buying startups allows them to bypass the slow, bureaucratic process of internal R&D.

While acquisitions are common, the valuation for startups can fluctuate wildly based on market conditions, as seen in the 2021-2022 period where VC markets were exceptionally high.

Getting distracted by corporate development discussions early on can kill a startup's momentum.