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ugh no - please don't do this! this is a negotiation, not a fight. talking price on the first date isn't going to be productive because neither party has any cl

ugh no - please don't do this! this is a negotiation, not a fight. talking price on the first date isn't going to be productive because neither party has any clue what is being bought and sold. also, do you own talking. surround yourself with advisors and experts, but don't give up control of the initial deal structure. Let your lawyers close the deal, don't even bother trying to do that yourself, but never let the lawyers handle the opening rounds. I like to take care of negotiating the initial letter of intent and then give that document to the respective lawyers to turn into a real contract - and intercede if anything starts to go sideways.

trevelyan 15y ago
I agree about the importance of managing the deal yourself. That said, there's definitely a way to get a sense for what the counterparty will pay without asking for an upfront price. He needs to know how the acquiring company is thinking about the acquisition. Are they buying the technology? Purchasing a revenue stream? Buying a marketing channel? A combination of the above? If this is primarily a technology acquisition the price can be discussed independent of sensitive business data. If it is a revenue play you can talk about multiples. And if it is a marketing play you can talk about they value users. The idea is to build consensus around an informal model for how to value the business without going into detail. It requires sharing some data, but not necessarily opening the books. I also think its reasonable to have a non-refundable deposit in exchange for going through the due diligence procedure. I wouldn't consider ballpark figures sensitive for my own business, but wouldn't agree to go through due diligence without being sure it wasn't a fishing expedition.
steve8918 15y ago
I agree. Don't screw this up by taking the wrong approach. Remember the HN article about the one guy who tried to negotiate his sneaker deals by himself and overplayed his hand and lost out twice. https://news.ycombinator.com/item?id=3466887 https://news.ycombinator.com/item?id=3466887 The company offering to buy you can't make an offer or even a ballpark offer because they have no idea what your company is actually worth. It might be a mess of Visual Basic code behind the scenes, or it could take 10 people to keep the server running, etc. Also, you could be faking your revenues, so they can't put any offers down before they know you're for real. I would suggest contacting a lawyer who is familiar with this and getting a good understanding of what your risks are by disclosing this information, but you also don't want to scare off the buyer.

trevelyan 15y ago

I agree about the importance of managing the deal yourself. That said, there's definitely a way to get a sense for what the counterparty will pay without asking for an upfront price. He needs to know how the acquiring company is thinking about the acquisition. Are they buying the technology? Purchasing a revenue stream? Buying a marketing channel? A combination of the above? If this is primarily a technology acquisition the price can be discussed independent of sensitive business data. If it is a revenue play you can talk about multiples. And if it is a marketing play you can talk about they value users. The idea is to build consensus around an informal model for how to value the business without going into detail. It requires sharing some data, but not necessarily opening the books. I also think its reasonable to have a non-refundable deposit in exchange for going through the due diligence procedure. I wouldn't consider ballpark figures sensitive for my own business, but wouldn't agree to go through due diligence without being sure it wasn't a fishing expedition.

steve8918 15y ago

I agree. Don't screw this up by taking the wrong approach. Remember the HN article about the one guy who tried to negotiate his sneaker deals by himself and overplayed his hand and lost out twice. https://news.ycombinator.com/item?id=3466887 https://news.ycombinator.com/item?id=3466887 The company offering to buy you can't make an offer or even a ballpark offer because they have no idea what your company is actually worth. It might be a mess of Visual Basic code behind the scenes, or it could take 10 people to keep the server running, etc. Also, you could be faking your revenues, so they can't put any offers down before they know you're for real. I would suggest contacting a lawyer who is familiar with this and getting a good understanding of what your risks are by disclosing this information, but you also don't want to scare off the buyer.