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Ask HN: Have you sat in on acquisition discussions? How to ask for a billion $?
People of HN, have you ever sat in on the first acquisition discussions? What was it like, tell your story in the comments.....
How does it work?
Company founders sit down in a room with a possible acquirer. The acquirer says "how much do you want for your company?". And the company founders say "A billion dollars".
Does it really go like that?
Seems hard to believe people can have the gumption to ask for such large numbers.
How do the founders get the courage to ask for such incredible numbers? What is it that makes a deal like that work? What does the acquirer say next? Do they laugh?
- dsacco 11y agoYes people have the gumption to ask for numbers like that, and yes that's how it works. What you described is a heavily abbreviated version, but it's pretty much it. Startup founders sit down with corp dev folks at a larger company. They've had a dance with them before even setting foot onsite, now they'll dance again in this meeting and similar meets for several months. A number will be proposed to the founders by the corp dev folks after they've done a fair bit of wooing, the founders can choose to push back or take it. They'll hash out details of the acquisition, such as finances, logistics, long term strategy, etc. But long story short, yes, they ask for really high numbers. It's not so much "gumption" as it is "you know what you're worth and you don't want to leave money on the table."
- Lordarminius 11y agoIt is less about gumption and more about familiarity with business valuation and negotiation techniques.Your ask price should bear a relationship to the valuation of your company.This is determined by its assets, earnings, position in the marketplace, proprietary technology and so on.If and when you do get into a situation where you wish to sell your company, it might be best to bring in professionals.
- hoodoof 11y agoWho are professionals in this field? What do they bring?
- Lordarminius 11y agoMentors, early investors with interests aligned to yours,finance professionals, lawyers. They bring knowledge of negotiation techniques, business intelligence on your acquirers,valution skills, legal skills ,financial skills eg how to reduce your tax burden, and best way to receive payment: cash? stock? a mix of both? All sorts of issues arise when large sums of money come into play.