Hard to give good advice from just the details in your question.
I guess the most important thing to think about is, do you want to be acquired? And if so, what would it take to make you sell? Then, does that number seem at all justifiable from your current trajectory?
Yes, we want to be acquired. We're excited to be able to take our skills to where we can compete on an international level - it's not something we feel we have the ability to do by ourselves and we've not met anyone who we thought would be a good fit to come in and do it with us, I think we're too small and you rarely meet people who will drop everything to be part of a 'maybe', when you can't offer massive stock options or salary.
Perhaps it's part of being what we are - loving what we do and being so proud of what we do that we're happy to work hard and see a few customers come in and make us profitable, but being afraid to really build something huge. I don't think I personally have it in me to do that, but I'm up for the idea of working with someone who is. We can only trust in this big company that they believe in what we have, and even if it gets destroyed or forgotten at least we gave it a chance.
Agreed. Step 1 is figure out what you want. If you do want to be acquired, do two things:
1- talk to as many smart people you trust who've been in similar situations. ask one or two if you can rely on them as sounding boards as you go through this process.
2- find a lawyer you trust. remember his job is risk mitigation and to protect you from the downside. he's an advisor, not a referee, so take his advice for what it is.
3- enjoy the process - you're gonna learn a lot and life is a marathon, not a sprint.
I guess the most important thing to think about is, do you want to be acquired? And if so, what would it take to make you sell? Then, does that number seem at all justifiable from your current trajectory?