There comes a time in a small companies life when it either needs to grow up or sell. For young companies I have two buckets.

• Young, but killer technology. Maybe game changing, but at least a group of very smart people that are focused on a hard problem with a core technology. The market hasn't adopted it, but you can see how it complements other technologies or products. Most of these companies are never known. Companies like Microsoft suck them up quickly and inexpensively.
• Young, but going viral. These are the rare companies that you start to here about all the time. They're cool, different, fun. Youtube and Digg are two of these. They grow rapidly, spread by word of mouth, but never fully grow up.

Here is why Digg needs to sell and YouTube did sell to Google. As a company grows the challenges shift. The first part of a company life is to get a product out the door, then you need user adoption, then comes revenues and then comes the big choice if you are fortunate to make it this far. Do we go it alone or sell? Forget the IPO market for a second or at least pretend it's healthy. Assume you are Digg. You have crossed all the hurdles and now you are at the point of go it alone or sell.

Pros to going alone

• Big payout to investors, founders and early employees with an IPO.
• Ego. The founders gain fame. Believe it or not, this is a big driver in the IPO vs Sell equation.
• You completely made it. There's no question if you have what it takes to start and grow a company. Few people can say this because they either fail or sell out early. But you hung in there and made it.
• Building a living institution that is a permanent reminder or your life's work after you're gone.

Cons to going it alone

• Probably get diluted at least one more time which means your piece just got smaller.
• Headaches up the ass. Did we make our numbers? Why is everyone complaining now? Do I really have to hit 10 cities in five days for the roadshow?
• The market changes. You lose your cool factor and now you're a rusty old car that was so yesterday.
• More Headaches. You loved the small company and the fight to grow, but now it's all internal politics and audits. Your PR is a mess. You're getting sued by a zillion leeches and you never spend time doing the things you started the company to do.

I think Kevin is tired of the bullshit. (Original: So, think about it. Kevin's tired. - I struck this because Kevin says it is inaccurate:)

[Updated: Kevin chimed in, so I'm adding it

haha "So, think about it. Kevin's tired.".

Kevin Rose says "I'm just getting started - 15 new features coming next month... get ready, this will be our biggest update since v3. "

]

First, we are glad to see you keep cranking it out. Go, go, go.

Secondly, he illustrates our point well. His juice is behind the features and the product. How long will he last when the fun of launching new features is crushed by the mess of running a large company? Our bet is not long.

We think he hedged his bet by starting a new company. The thrill of a new company is what drives entrepreneurs. Its not HR issues and grinding it out. This is what big institutions are for. To take businesses, and run them like businesses. They pay pretty well to take over what you have done thus far and they have the infrastructure to support it. Now, most M&A teams will require that key players stay on through the acquisition and vest for a period, but its pretty much up to the founder on how hard they work. Some really mix it up in new companies and others put themselves out to pasture.

So, if Digg is now at the point where it's getting to be more work than fun. Take the chips off the table. Go to Hawaii for a week and stay in the Four Seasons. You can afford it. And smile because you were paid like an MLB All-Star for a few years of work.

Here is the question for Kevin and team, who would you like to be acquired by and at what price? I'm sure our M&A friends will be glad to help you out.