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The only response you should make to these sorts of things are "Give me a number, if it is close we can go to the next step." That is it. If they give you a nu

The only response you should make to these sorts of things are "Give me a number, if it is close we can go to the next step." That is it. If they give you a number, then you say "Put it in a MOU where you will pay us 10% of that number if these discussions break off for ANY reason." Only after you have a number you would actually sell the company for, and you know that if they are wasting your time you will still get enough cash to cover the extended runway you will need to keep going after they leave, then it is possible they have enough skin in the game to be aligned more with your interests.

mysterypie 5y ago
> "Give me a number, if it is close we can go to the next step." If they reply that they need to know your revenue, expenses, number of sales, etc., before they can even guess at a number, then what? Do you give them your financial info? Or do you stick to your guns and ask them to come up with some number by themselves before you engage with them at all?
- avereveard 5y ago
  If corpdev is interested in a startup acquisition they're looking to complement their offering to gain an advantage against their own competitors, a startup little sales figures are irrelevant to them, they're after the product, the talent or the user headspace and have a pretty good idea of what your company is worth to them. Anchoring negotiations to your business value and not the synergic value of your product in their offering is a mistake, usually. So no they don't really need your economics. Also, if they came to acquire a company without knowing the cpany worth or without it being part of a bigger strategy, chances are they're the bad kind of corpdev
- ChuckMcM 5y ago
  I don't give them any of that. They ALREADY know what they think it would cost them to get into your space. They figured that out long before they called you and talked to you. That they called you means one of two things; Either the number they came up with was large and so they are looking to see if they can get a discount by buying something, or there are some employees in your company they want for their effort. This litmus test will tell you which it is. If their number is reasonably high, they know it will be hard to get into your space. If the number is low, they just want to poach employees. There is zero value in talking to them without a number you like on the table. You must defensively reduce the information asymmetry in any way possible.
forgingahead 5y ago
Have you actually done this yourself for one of your own companies?
- ChuckMcM 5y ago
  Yes, and it what a much better experience than companies where I had to watch people make the mistake of thinking that BigCorp's interest was based on the quality of the CEO's talents and wasted months doing due diligence which did nothing but slow us down.

mysterypie 5y ago

> "Give me a number, if it is close we can go to the next step." If they reply that they need to know your revenue, expenses, number of sales, etc., before they can even guess at a number, then what? Do you give them your financial info? Or do you stick to your guns and ask them to come up with some number by themselves before you engage with them at all?

avereveard 5y ago
If corpdev is interested in a startup acquisition they're looking to complement their offering to gain an advantage against their own competitors, a startup little sales figures are irrelevant to them, they're after the product, the talent or the user headspace and have a pretty good idea of what your company is worth to them. Anchoring negotiations to your business value and not the synergic value of your product in their offering is a mistake, usually. So no they don't really need your economics. Also, if they came to acquire a company without knowing the cpany worth or without it being part of a bigger strategy, chances are they're the bad kind of corpdev
ChuckMcM 5y ago
I don't give them any of that. They ALREADY know what they think it would cost them to get into your space. They figured that out long before they called you and talked to you. That they called you means one of two things; Either the number they came up with was large and so they are looking to see if they can get a discount by buying something, or there are some employees in your company they want for their effort. This litmus test will tell you which it is. If their number is reasonably high, they know it will be hard to get into your space. If the number is low, they just want to poach employees. There is zero value in talking to them without a number you like on the table. You must defensively reduce the information asymmetry in any way possible.

forgingahead 5y ago

Have you actually done this yourself for one of your own companies?

ChuckMcM 5y ago
Yes, and it what a much better experience than companies where I had to watch people make the mistake of thinking that BigCorp's interest was based on the quality of the CEO's talents and wasted months doing due diligence which did nothing but slow us down.