Based on this thought process, I think a rough and somewhat objective rubric can be established for when to sell: based on your plan, how long will reality take to catch up with the hope? Time is an important measure of risk in that startup visibility rarely stretches beyond 12 months. When an offer, based on reasonable multiples, is compensating a company for the past year’s performance, selling is about liquidating the asset. When a company is being paid a standard multiple against a high confidence next year plan, selling is still largely about liquidity but does offset a year of risk in the plan. When that multiple is applied to the next two years of risk, the board should be giving very strong consideration to selling. At three years, I think it really is a no brainer.

Hard to know, but I’d guess that the Patzer Problem was more about VC interests than whether it was a no brainer for shareholders, on a dilution adjusted basis, to sell Mint for $170 million. I wonder how many years of Mint’s plan they were being compensated ahead of. Probably they were at a peak of hope. If so, it was a good time to sell.