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I frequently tell clients to avoid "tattoos," and what I mean by that is a permanent
obligation that you can't get rid of easily. Any time you're doing something as
an entrepreneur, you should be viewing it through the prism of being acquired. And
what I mean by that is, how would someone buying you view what you just did? So if
you're entering into an agreement and it has an exclusive relationship for
three or four years, you might not have a problem with it. But because this is a game-
changing decision for the company and you’re partnering up with this big company –
and of course you wouldn't have a problem with it. But how would someone buying
you view that? They might have an issue with it, because they're buying
you for a reason other than your revenues – they want your technology and
they don't want to be locked up
with this party that you’ve contracted with.
My point is a tattoo is something that can permanently affect the
company
in a way that a buyer could have a problem with it. And if a buyer has a
problem with it, an investor is going to have a problem with it, because
investors are the ones that get paid when companies get bought.