WHEN TO SELL

By the time your growth rate is slowing, you've likely already missed the window to sell. Buyers pay for the trend in your growth rate. Every acquirer runs the same forward model, and the input that moves the number is whether growth is improving or deteriorating.

So the number to watch is the second derivative: how fast the growth rate itself is changing.

Three states:
• Growth rate rising, and rising faster each quarter. Hold.
• Growth rate still rising, but the increments are shrinking. This is the window.
• Growth rate falling. The window closed a few quarters ago and you're the last to know.

Most founders sell in the third state, because the third state is the first one that shows up in a board deck. The first two require you to look at the change in the change, and no standard dashboard plots that for you.

Run a process when the second derivative goes negative while the first is still positive. Growth still looks great to a buyer. The deceleration is visible only to you.

Founders: pull the last 8 quarters of your top-line growth rate and plot the quarter-over-quarter change in that number. If that line has turned down while growth is still climbing, you're in the "sell" window right now.