I don't know what my number is. Here's how to figure it out.

Every founder gets asked some version of this eventually, by a board member, an investor, or themselves at 2am: is there a number where you'd sell? Most people answer with a feeling. That's the problem. A feeling doesn't hold up against a real offer, and a real offer doesn't wait for you to figure out how you feel about it.

Your number isn't actually one number. It's usually three, tangled together: what you'd need to never worry about money again, what makes the risk of staying in feel worse than the certainty of cashing out, and what you'd actually walk away with after dilution, liquidation preferences, and taxes take their share. Most founders have only ever thought hard about the first one.

That third number is where it gets interesting, and where most people are wrong by a lot. A $10 million sale doesn't mean $10 million in your pocket. Entity structure, how long you've held your stock, and whether QSBS applies can be the difference between owing long-term capital gains and owing close to nothing. Founders who've never modeled this tend to anchor on the headline number in a term sheet instead of the number that actually lands in their bank account, and those two numbers can be wildly different.

The fix is boring and it works: model the liquidation waterfall and the tax scenario before anyone's asking, not after. Know roughly what a $5 million, $20 million, and $50 million exit actually nets you personally, given your current cap table and structure. When a real offer shows up, and it usually shows up on somebody else's timeline, not yours, you already know whether it clears your number instead of scrambling to calculate it in 48 hours.

There's no universal answer here, and anyone who gives you a formula is guessing. But “I don't know” is a worse position to be in than a real number, especially on the one day someone actually asks.