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What shows us it was mismanaged? How do we know the acquiring company didn’t cold feet and bail after the founders had run out of options to hedge? You can’t r
by austenallred 9y ago
What shows us it was mismanaged? How do we know the acquiring company didn’t cold feet and bail after the founders had run out of options to hedge?
You can’t raise a round with an acquisition pending, so you kind of have to put yourself in a precarious position. Perhaps they could have done something else, but hindsight is 20/20.
- yawaramin 9y agoA few things: - They didn't pay contractors for months of work - They gave no hints to anyone that they were running out of funds - They agreed to stop looking for acquisitions while in discussions, without requiring a bailout penalty clause in exchange - $45m for a lock? Where the heck did it all go? Elon Musk's initial investment in Tesla was $6m in 2004.
- greglindahl 9y agoI have been a founder at 2 startups that were acquired. In both cases there was a "noshop" with no bailout penalty. But the "noshop" didn't say we couldn't look for additional investors. I don't see anything in this writeup that implies that the noshop was unusual.