On October 30, 2008, I wrote an email to Twitter’s board of directors, which started:

It seems to me, there are three reasons to sell a company. Any of them will suffice:

This email was in reply to a thread in which we were briefly discussing an overture we’d received from a much larger company. Of course, in 2008 Twitter was much, much smaller than it is today. We were fewer than fifty employees, had raised “only” $20 million or so, and probably had fewer than ten million users. We were still having a lot of technical issues. And while growth had been good in general, it wasn’t yet consistent. (The ridiculous growth curve started in 2009.) Who knew what the future held? Acquisition wasn’t an obviously dumb idea.

After thinking about it a bit, I offered to the board these “three reasons to sell”:

1. The offer captures the upside

Every business has natural growth limits. If someone offered you $10 million for your coffee shop that does $250,000 a year in sales, it’s pretty clear you should sell—from a purely financial perspective. Finances are only one perspective, but if you have many shareholders, it’s one you are obligated to take seriously.

In 2002, Google reportedly turned down a $3 billion offer from Yahoo!. That looks like a no-brainer in retrospect, because Google is such a behemoth. And it was probably clear to Larry and Sergey at the time that if they were successful, the company is worth many, many times more than that.

However, not every company is chasing a Google-sized opportunity. At the time, I cited Photobucket selling for $300 million to MySpace, which seemed like a huge win for that service. Had I been given an offer like that for Blogger a few years earlier, I would have logically said yes.

At the time, the offer we had on the table for Twitter—though a heck of a lot of money and a huge win for investors and anyone else involved—didn’t seem like it captured the upside. Even though we weren’t huge, and there were still a lot of doubters, I believed our potential was unbounded.

But there are other reasons to sell…

2. Imminent threat

There’s potential, and then there’s risk. And there’s always risk, even in the best situations. But there are cases in which your chances of reaching your potential are slimmer than normal and maybe even totally out of your control.

Consider YouTube’s legal issues or PayPal’s fraud challenges. Both companies had huge outcomes, but seeking a corporate parent at the times they did had safety, as well as financial, benefits. Perhaps they would have held out for much longer and grown to be strong public companies of their own otherwise. They were certainly in big enough businesses.

Sometimes the threat is internal—an inability to execute on one’s opportunity. Friendster might be an example. When they turned down $30 million in pre-IPO Google stock, it was not a dumb move from a “capturing the upside” perspective if you consider they were the first big social network, and they had no real competition. It’s not clear how obvious the internal threat was, though.

In Twitter’s case, one could argue we’d had an internal threat similar to that of Friendster’s at one time. There was a while where our technical issues made us quite vulnerable. But by the time of this email, we felt we had moved past that. (We hadn’t quite, but this was eventually true.) We had competitors who were larger and paying increasing amounts of attention to us, but it didn’t feel like we were in real trouble.

But there might be another reason…

3. Personal choice

Sometimes the founders or other key people may just be done. This is actually quite common and drives a lot of small acquisitions. It doesn’t apply as much as companies get larger, because everyone is (eventually) replaceable—especially if the company is doing well.

Back in 2003, I struggled a lot about the decision to sell Blogger to Google. The financial win wasn’t clear (it was for a small amount of private stock—again, before their IPO). We had tons of room to grow and didn’t have any real threats. And I even had a term sheet for more funding on the table. But I was compelled ultimately because I felt like Google was the best home for this thing I’d built to reach its potential. I also knew I wanted to start another company and thought I’d come out of a couple years at Google smarter and better. I also knew the team was going to be happy to join Silicon Valley’s most esteemed company.

In the Twitter case, we had no desire to sell. I had actually just become CEO and was raring to go—as was the team. Additionally, the company we were having the discussion with didn’t seem like one in which we’d fit particularly well or the team would be stoked about.