The situation is way more severe than this makes it sound:
* The benefit you get from $10b is not actually 200 times as much as the benefit of $50m. (Economists would talk of a "utility function" - that's what you should actually be taking the expectation of - and what I'm saying is that it's nonlinear.) How much it's worth very much depends on your personality, but for most people (maybe all?) it's worth well under twice as much, maybe barely 10% more? Either way, you never have to work again, and maybe your kids never have to work again, and you can enjoy your lifetime retirement in a great deal of luxury, so the difference in experience is minimal. It's probably not a big deal if you have to be careful not to charter private jets too often. So even if the chance of getting $10b is 1 in 10, or even 3 in 4, you still might find the $50m option wins.
* The $50m is right now whereas the $10b dollar requires effort. Not just 9-to-5 effort either, but possibly a CEO-of-a-startup 90-hours-a-week effort. Again, the benefit of $10b is not actually that much compared to $50m, so you might consider that marginal benefit less than than the extra work. If that's so, you would take the money now even if the big win were 100% guaranteed!
The thing is a piece of software that could replace and update Revit is not going to be built by a lone developer. I know people have built some pretty amazing stuff, but for something to operate with that amount of polish and reliability it's going to take a pretty big team and some experienced people to lead them which means some hefty VC investment. While you or I might be easily bought off a group of VC firms are not going to let it go so cheaply.
The part missing from your hypothetical scenario is that founders have egos and many would rather keep ownership of their company and don't want to work for someone else. (I made previous comment about this.[0])
Yahoo made offers to buy Google and Facebook but we obviously know that Larry Page and Mark Zuckerberg did not become employees of Yahoo reporting to their boss Jerry Yang. They said "no sale".
In Facebook's case of being the buyer, Kevin Systrom of Instragram said "yes" to Zuckerberg but Ev Williams of Twitter said "no".[1]
If you're a founder of a successful startup and Autodesk/Facebook/Google come calling with an offer of (m|b)illions to buy your company, you can listen to them but you don't have to sell.
[0] https://news.ycombinator.com/item?id=21419098
[1] https://techcrunch.com/2013/11/04/the-three-reasons-twitter-...
Well as you said, no, is it better to have a company valued $50M growing 30% per year, or having $50M in your bank account ? Most entrepreneur will prefer the latter
I think you have that backwards, Google kept asking Yahoo to buy them [1]
[1] https://finance.yahoo.com/news/remember-yahoo-turned-down-1-...
The early 1998 $1 million offer was prompted by Larry Page and Yahoo rejected him. However, the 2002 offer of $3 billion was from Yahoo and Google rejected them. In 2002, Google was already starting to see profits so they were under no pressure to sell.
"In 2002, Yahoo's CEO at the time, Terry Semel, engaged in negotiations to acquire Google, which lasted several months.
The outcome of the negotiation was Semel balking at Google's price tag of $5 billion."
That sort of logic is true if you're starting from scratch. But if you've already grown to a $50M company, your chances of being a $1B company are much better.
Put another way, if I pick a random person and ask you what the probability is that they'll finish a marathon, you'd probably say it's not very likely. But if I tell you they just passed mile 26, you might revise your estimate.
$50m realized, now... cash in your pocket vs. maybe $1B.... but you don't know - there's a very real chance the company will die before that.
50m now vs 1b later is way too simplistic of a view.
The list goes on and many different tactics are perfectly legal or can be ambiguous requiring proof of motive (nearly impossible). You're engaging in war with someone who has far more resources than you. Sure, you couod win and shift or supplant their market share but more likely you'll be crushed.
Choosing between that option and $50m retiring happily, I'll choose the second option every time. I like the idea of competing but let's be realistic, this is not your restaurant competing with the other guy down the street where it might really come down to your actual competitive advantage in what you're providing a customer. Many times it comes down to business strategy and resources to execute those strategies.
In fact, it would probably make more consumers better off than if your company had remained independent: Users who were unwilling or unable to abandon Autodesk in order to use your software would be able to use it if it became part of Autodesk's offering.
Plus you'd be rich.
In your example, before giving you an offer, the big software company will conduct an internal analysis to figure out how much money they'd have to spend to develop the bare-minimum featureset to prevent their customers from fleeing to your competing product, then they'll back that number off a little bit, and try to buy you out. This number will probably be significantly higher than the amount it costed you to build the thing, because for them to replicate your features, they have the added overhead, bureaucracy, and inefficiencies that come with being a megacorp.
If you accept the offer, it saves them money and time.
If you decline the offer, they'll just greenlight their internal projects and steamroll you.
If I was able to build such a software that has potential on stealing Autodesk software. And Autodesk showed at my door with $50,000,000 in cash. I would sell it so fast that I would be flying in a hired private jet to some island free of the pandemic by next morning.
The rational is simple. I will make up some numbers: If I have 1 chance in 1,000 to get 10 billion, that is an expected value of 10 million (10b/1000). 50 millions is way better return than the expected value of 10 million.
Facebook, Google, Apple, Oracle, Adobe, Autodesk... any of them has deep pockets to buy any one that has a chance to steal their business. It is a good deal for the challengers, because is a all-cash no-risk opportunity better than any expected value. It is a good deal for the big-ones as they protect their business and some times they get a good deal (YouTube). The consumers, the economy and society as a whole are the big losers in the deal.