11 ms·

Learn from my mistake. Unless you're already financially secure (meaning you could stop working and live your current lifestyle for several years) then my advi

Learn from my mistake. Unless you're already financially secure (meaning you could stop working and live your current lifestyle for several years) then my advice is to take the money while you can OR to leverage that valuation to pocket a few million $ (by selling equity). I'm doing great with my current startups now but several years ago I founded a very promising startup which almost immediately got many acquisition offers in the high six figures and low seven figures. I, of course, took all of this to mean that we were onto something and were sure to get very wealthy in short order. That didn't happen. What our app did got simply duplicated as a feature by an industry leader in software for our target vertical and that startup rapidly went from extremely profitable to bust. TL;DR: Unless you're financially secure take the money.

nebabyte 9y ago
Out of curiousity, what was that first startup?
- gotbeans 9y ago
  Common. Why do you thing he didn't say in the first place.
  - JungleGymSam 9y ago
    come on
mosselman 9y ago
Indeed, never having to work again in order to provide yourself with the basics (home, food, car, education for your kids, etc) is already a huge thing to achieve in life. Don't let multi-billion dollar acquisitions you read about here cloud your appreciation of something as big as this.
- enraged_camel 9y ago
  Besides, several million bucks can be turned into much more with with relatively little effort. This is the reason why people who receive sizable inheritances get several steps ahead of others.
  - deleted 9y ago
    [deleted]
kbenson 9y ago
Without any relevant startup experience to back it up my opinion, I concur. It's a hard pill to swallow, but unless you are working at the top of your software area with mostly theoretical bits that you've worked out, it's not really all that hard to copy most things in software (unless you have contracts in that give you an advantage, sort of like a mini monopoly). It's bad enough that a few years ago here people were complaining that they would do a Show HN submission, and find a few weeks after that someone had taken their mostly completed idea, assigned a whole team of cheap developers to it and executed on it not only faster, but better. The question here is whether the business he's got running has aspects that can't be easily copied (and assessing this realistically might be hard), and if it can be copied, can it be done so without taking too long or taking more than the ~10 million plus the submitter thinks someone will offer?
- perilunar 9y ago
  > It's bad enough that a few years ago here people were complaining that they would do a Show HN submission, and find a few weeks after that someone had taken their mostly completed idea, assigned a whole team of cheap developers to it and executed on it not only faster, but better. Is this still a problem? Don’t PG and others say not to be afraid of others stealing ideas, and that ideas are worth little, and that it’s all about the execution? Makes me wary of sharing my almost complete idea.
  - onlyrealcuzzo 9y ago
    Yeah, I used to be really afraid of sharing my ideas until I finally started my own company. Ideas are cheap. Building a company is hard work. It takes a good idea and a passionate team to create something great. Sure you run a chance of someone taking your idea. But are they more dedicated and passionate about it than you? If so, you're in the wrong business. Better to find out sooner, tbh.
    - indymike 9y ago
      If you have an idea that someone can read a blog post and then replicate, the idea isn't sophisticated enough or you probably just shouldn't write that blog post.
erex78 9y ago
There is a lot of advice on the thread saying: take the money. Given your personal situation etc. this may very well be the right choice. But you need to realize that just because you've been approached for acquisition and even if somebody tells you straight up "we want to acquire you", it sounds like you are far away from actually getting acquired. The road from casual interest to money in the bank is long and bumpy. Unless you actually have a term-sheet in your inbox, you aren't in the position to make this decision right now. The right tactical approach is for you to push hard on both fronts - push as hard as possible on fundraising as if you have no other option. And if you do want to consider an acquisition, start approach these companies and ask for term sheet. If both go well, then you have a decision to make.. (and more leverage..)
- wheelerwj 9y ago
  > Unless you actually have a term-sheet in your inbox, you aren't in the position to make this decision right now. even then, its not over till the cash is in your account.
  - sebbean 9y ago
    that's after you make the decision oy
  - tedmiston 9y ago
    Even then, it's not over completely if part of the cash is attached to milestones or subject to a new vesting schedule. I've seen friends' companies acquired without them ever seeing the full "acquisition price".
    - pc86 9y ago
      If the cash is attached to milestones or vesting, it won't be in your account...
- lnanek2 9y ago
  Definitely. I've been at startups who got signed letters stating the acquisition will go through from the other company, the other company spends months in due diligence learning every secret we had, then they just stop working on it and leave the deal dead.
hpcjoe 9y ago
This +100 One day I'll write my story. A few acquisition offers, some investment offers. Foolishly we rejected them. Company when bust with the help of a bank last year. Same rules as in baseball. Don't swing for the fences. Many singles and doubles win you the game. Homers and grand slams are infrequent and elusive. Had the same sort of capital issues. Same problem with VCs... I'll write my thoughts on them some day as well. Take the money and run. Rinse and repeat.
- nodesocket 9y ago
  Love the baseball analogy and absolutely true. I slightly modified and posted to my twitter: > Startups like nearly everything in life can be equated to baseball. Don't swing for the fences. Many singles and doubles over the long haul.
thisanonguy 9y ago
Wow, hijacking the top comment since this blew up. If you want to contact me, email thisanonguy1@gmail.com with the details. This is why I love HN - it's an amazing community when you are willing to put your heart on your sleeve.
john_moscow 9y ago
Curiosity question: why didn't you patent some key element of your value proposition to protect against someone copying it?
PerfectElement 9y ago
Can you give more details about your startup? Were you a single founder bootstrapping?
reilly3000 9y ago
I'll ditto the take the money message. Great pain and suffering awaits those who don't whose company then becomes less valuable. But, life is pain. Take the money because the next idea, the one you really wanted to do, that can happen. Once you've sold a company fundraising is 10X easier.
tinus_hn 9y ago
It's a gamble and it's easier to manage the risk of gambling if you're rich already. Is this the chance of a lifetime? Or is it just a good idea that may make a lot of money?

nebabyte 9y ago

Out of curiousity, what was that first startup?

gotbeans 9y ago
Common. Why do you thing he didn't say in the first place.
- JungleGymSam 9y ago
  come on

mosselman 9y ago

Indeed, never having to work again in order to provide yourself with the basics (home, food, car, education for your kids, etc) is already a huge thing to achieve in life. Don't let multi-billion dollar acquisitions you read about here cloud your appreciation of something as big as this.

enraged_camel 9y ago
Besides, several million bucks can be turned into much more with with relatively little effort. This is the reason why people who receive sizable inheritances get several steps ahead of others.
- deleted 9y ago
  [deleted]

kbenson 9y ago

Without any relevant startup experience to back it up my opinion, I concur. It's a hard pill to swallow, but unless you are working at the top of your software area with mostly theoretical bits that you've worked out, it's not really all that hard to copy most things in software (unless you have contracts in that give you an advantage, sort of like a mini monopoly). It's bad enough that a few years ago here people were complaining that they would do a Show HN submission, and find a few weeks after that someone had taken their mostly completed idea, assigned a whole team of cheap developers to it and executed on it not only faster, but better. The question here is whether the business he's got running has aspects that can't be easily copied (and assessing this realistically might be hard), and if it can be copied, can it be done so without taking too long or taking more than the ~10 million plus the submitter thinks someone will offer?

perilunar 9y ago
> It's bad enough that a few years ago here people were complaining that they would do a Show HN submission, and find a few weeks after that someone had taken their mostly completed idea, assigned a whole team of cheap developers to it and executed on it not only faster, but better. Is this still a problem? Don’t PG and others say not to be afraid of others stealing ideas, and that ideas are worth little, and that it’s all about the execution? Makes me wary of sharing my almost complete idea.
- onlyrealcuzzo 9y ago
  Yeah, I used to be really afraid of sharing my ideas until I finally started my own company. Ideas are cheap. Building a company is hard work. It takes a good idea and a passionate team to create something great. Sure you run a chance of someone taking your idea. But are they more dedicated and passionate about it than you? If so, you're in the wrong business. Better to find out sooner, tbh.
  - indymike 9y ago
    If you have an idea that someone can read a blog post and then replicate, the idea isn't sophisticated enough or you probably just shouldn't write that blog post.

erex78 9y ago

There is a lot of advice on the thread saying: take the money. Given your personal situation etc. this may very well be the right choice. But you need to realize that just because you've been approached for acquisition and even if somebody tells you straight up "we want to acquire you", it sounds like you are far away from actually getting acquired. The road from casual interest to money in the bank is long and bumpy. Unless you actually have a term-sheet in your inbox, you aren't in the position to make this decision right now. The right tactical approach is for you to push hard on both fronts - push as hard as possible on fundraising as if you have no other option. And if you do want to consider an acquisition, start approach these companies and ask for term sheet. If both go well, then you have a decision to make.. (and more leverage..)

wheelerwj 9y ago
> Unless you actually have a term-sheet in your inbox, you aren't in the position to make this decision right now. even then, its not over till the cash is in your account.
- sebbean 9y ago
  that's after you make the decision oy
- tedmiston 9y ago
  Even then, it's not over completely if part of the cash is attached to milestones or subject to a new vesting schedule. I've seen friends' companies acquired without them ever seeing the full "acquisition price".
  - pc86 9y ago
    If the cash is attached to milestones or vesting, it won't be in your account...
lnanek2 9y ago
Definitely. I've been at startups who got signed letters stating the acquisition will go through from the other company, the other company spends months in due diligence learning every secret we had, then they just stop working on it and leave the deal dead.

hpcjoe 9y ago

This +100 One day I'll write my story. A few acquisition offers, some investment offers. Foolishly we rejected them. Company when bust with the help of a bank last year. Same rules as in baseball. Don't swing for the fences. Many singles and doubles win you the game. Homers and grand slams are infrequent and elusive. Had the same sort of capital issues. Same problem with VCs... I'll write my thoughts on them some day as well. Take the money and run. Rinse and repeat.

nodesocket 9y ago
Love the baseball analogy and absolutely true. I slightly modified and posted to my twitter: > Startups like nearly everything in life can be equated to baseball. Don't swing for the fences. Many singles and doubles over the long haul.

thisanonguy 9y ago

Wow, hijacking the top comment since this blew up. If you want to contact me, email thisanonguy1@gmail.com with the details. This is why I love HN - it's an amazing community when you are willing to put your heart on your sleeve.

john_moscow 9y ago

Curiosity question: why didn't you patent some key element of your value proposition to protect against someone copying it?

PerfectElement 9y ago

Can you give more details about your startup? Were you a single founder bootstrapping?

reilly3000 9y ago

I'll ditto the take the money message. Great pain and suffering awaits those who don't whose company then becomes less valuable. But, life is pain. Take the money because the next idea, the one you really wanted to do, that can happen. Once you've sold a company fundraising is 10X easier.

tinus_hn 9y ago

It's a gamble and it's easier to manage the risk of gambling if you're rich already. Is this the chance of a lifetime? Or is it just a good idea that may make a lot of money?