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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 reali
by 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 agothat's after you make the decision oy
- tedmiston 9y agoEven 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 agoIf the cash is attached to milestones or vesting, it won't be in your account...
- lnanek2 9y agoDefinitely. 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.
- sjg007 9y agoDo you add a break up clause to prevent this?
- osrec 9y agoYou absolutely should.
- sgs1370 9y agoYou should* also be working with a banker who sells companies for a living. They will take some % (10%? Who knows) of the deal, but in my limited experience it seems worth it, since they will also help you make introductions and give advice - maybe not perfect advice but it will be advice that will either raise the price of your sale, make it happen faster, or promote some corrupt agenda the banker has (i.e. work with a banker who comes to you from someone who can vouch for them) There are obviously some things to be very careful in terms of shopping for a deal, but that's also how higher valuations occur. And, if the acquiring company doesn't want to deal with it they can give you a "no-shop" offer that is higher, in addition to the breakup/no-deal fee. *This "should" in addition to everything else above is just an opinion. I've only been in a company once that was acquired successfully and heard stories about other situations, so take it for what it's worth which might be nothing :-)
- tptacek 9y agoI could be wrong, and if I am I'd appreciate informed corrections, but I don't think it's the norm for low-8-figure transactions to use bankers.
- 9y ago