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Ask HN: What not to talk to acquirer about?
I was recently approached by a PE firm that is gobbling up companies in my space at pretty insane clip. I have a call scheduled with one of their lower level folks. I've read about these kinds of fishing expeditions but never been the subject of one. Can anyone offer some advice on the parameters for the discussion? What topics, if any, should I consider off-limits?
- codegeek 9y agoDon't give out your secret sauce. Let them taste it but not "how" it is done. So just tell them the "what" and not the "how".
- muzani 9y agoI was extremely open with my acquirer, even saying things like us not planning to work there after the acquisition and pointing out every single thing that sucked about the company. They were happy enough that they bought it for 3x what we actually wanted.
- danieltillett 9y agoI think you make a good point which is being honest is the best approach. Unless you are giving away the company secrets there is no reason not to be honest.
- relaunched 9y agoThere are a couple things you should know going in, or at least by the end of the first call: 1) What is this PE firms model? Google them, cold call founders of companies they've bought, etc. Some will want to buy you to integrate with existing entities. Others want to accelerate your growth, based on their operating model. If you don't have time to figure this out, you need to know all of these details by the end of your first call. 2) What do you want out of the deal? Ever entrepreneur should have a number or a vision, or both. You need to know what gets a deal done for you. 3) Why are they reaching out to you? Is it exploratory or already vetted and strategic. Before you say anything of substance, you should understand where they are at in the process. Oftentimes the level of the person you are speaking with dictates the seriousness of the conversation / interest level. 4) Are they winners? Funds can't help but brag about their successes. Who are their big exists? What do they return to their investors? How many funds have they closed (and when)? If you have any additional questions, my email is in my profile.