Last month, rumors first emerged that Google was pursuing cloud security startup Wiz, and a suggestion of $23 billion was on the table, the most lucrative offer ever made to a startup. There were a lot of moving parts before the deal finally fell through, and it’s fair to ask: What are the mechanics behind putting a big deal like this in motion, and the way does a startup determine whether to sell or not?

We spoke with Jyoti Bansal, founder and CEO of Harness, a developer tools startup that has raised about $575 million and made a variety of small acquisitions along the way. While Bansal has no direct knowledge of the Google-Wiz negotiation process, he experienced the adulation of a large company when Cisco got here in after his previous startup, AppDynamics. Cisco ultimately bought the company just days before it went public in 2017 for $3.7 billion.

He says there are three aspects at play in deals like this. The first is how serious the offer is, and whether it’s concrete or simply exploratory. In the case of a private company like Wiz, it’s likely to be exploratory at first, since there’s not as much public details about its funds as there can be with a public company.

Bansal says that when he was going through the AppDynamics negotiations with Cisco, he had recently filed his S-1 with the SEC, and all of his financial cards were already on the table. “So for an acquirer, acquiring a private company that’s on the IPO track and a few days away from an IPO is fundamentally no different than acquiring a public company,” he says. “All the information they need is there, and they don’t have to worry about whether they’re missing something, or whether the information isn’t clean, verified, or audited.”

Once you’ve got determined how serious the company is, you wish to investigate whether it’s a good fit. “The second factor in any type of courtship that happens is why are you merging companies? Is it interesting? Is it exciting?” You also need to consider what is going to occur to your employees and your products: Will some employees lose their jobs? Will products be discontinued or canceled?

Finally, and maybe most significantly, the economics of the deal need to be examined to see if it is sensible and represents good value for shareholders. From Wiz’s perspective, this was a huge offer (assuming the rumored amount was accurate) that was 46 times current ARR and 23 times projected 2025 ARR. However, Wiz believed it could be higher to remain a private company.

In Bansal’s case, when Cisco courted him, he was in the middle of his company’s IPO tour. It took a few days for the company to go public, but even with the information Cisco could analyze, there have been ongoing discussions, and it wasn’t easy for Bansal to surrender his baby, even when the price was right in the end.

Both firms knew they’d a strict deadline. Once the IPO happened, it was over. The negotiations ended with three offers, and after they ended, Cisco got the company. “Ultimately, it comes down to what’s best for all the shareholders in terms of risk and reward. It’s about what’s the risk of being independent versus the reward of selling,” Bansal said.

The first offer was according to the IPO value and was easy to reject. The second was higher, but after discussing it with the board, Bansal again said no. “Then they came back with a third offer, and in the third offer it made sense, from a risk-reward perspective, for our shareholders to sell the company.” And they sold at a range of two.5 to 3 times the IPO valuation.

It’s easy to think that with billions of dollars at stake, the decision to sell can be easy, however it really wasn’t. “It wasn’t an easy decision on our part. It sounds like ($3.7 billion) is a very easy decision.” But he says you’ve to survey your investors, your fellow executives, your board members — they usually all have different interests, and also you’re trying to make the right decision for everybody involved.

Wiz thought it was higher to stay independent. In AppDynamics’ case, with the pressure of an IPO looming and a good deal on the table, the company eventually decided to accomplish that. “So for us to independently get to a valuation of two and a half, three times our IPO valuation, we would need at least three years of good execution,” he said. “And there were a lot of unknowns, a lot of risks for the company, like what’s going to happen in the next three years.”

But that doesn’t mean he doesn’t regret it, regardless that he remodeled 300 of his employees millionaires with the deal and his personal wealth. When he looks back on the moment of the announcement, he realizes that it’s entirely possible he could have made that much money, or much more.

“I always wonder what AppDynamics could have become if we had gone to IPO. There are a lot of unknowns, and hindsight is 20/20, but if you look back, we sold the company in 2017, and the years after that sale, post-2017, were some of the best boom years in tech, especially for B2B SaaS,” he said. He ultimately could have made more cash, but he began Harness as a substitute and is joyful constructing a second company.

It’s necessary to note that Wiz’s offer stays mired in rumors, so it might or may not be that big. But if it were, the founders may also regret not getting Wiz the value it could have had if it had taken the big money and run.