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YC's advice around these kind of talks is that they're a colossal waste of time. If you're interested in an acquihire situation then there may be some value in
by OmarIsmail 13y ago
YC's advice around these kind of talks is that they're a colossal waste of time. If you're interested in an acquihire situation then there may be some value in meeting, but otherwise the chances of something meaningful coming from this is very low.
Remember, for these M&A guys, meeting people like you is there job. For them having these meetings is a productive use of their time. It costs them nothing, and they only gain more insight into the marketplace.
What do you get out of these meetings? They're not going to tell you anything special/secret about their product/market.
What I've seen some people do is have an initial call/meeting (don't travel for it) for about an hour to feel things out. If it seems like there's genuine interest then have there be a "break up" penalty. i.e. if things don't work out they pay you $5-10K.
That way you get something for your time if it doesn't work out, and if they're not serious they won't agree to it.
- man_bear_pig 13y agoHmmm. That's interesting (breakup-fee). Is that market or would you say it's an exception for startups in acqui-hire situations? My only reason why I would take this a bit more seriously is that I know the following: a) a friend of mine who plays in the similar space - she has had talks with them for couple of months earlier this year about starting something similar for them before her business got got acquired by someone else. She told me that they seemed to be pretty serious and have been contemplating for a while how to get it started. b) there's also not many players who really understand that market and/or are in the market. c) they have precedence of similar behavior in different part of their business within the past 6 months (early stage acquisitions - one was series a then 6 months acquired but they're definitely on a talent or talent/hire acquisition spree). Thank you so much for your advice!
- mst 13y agoRather than a break up fee, perhaps it's worth charging them consultancy rates for explaining what you're doing to them - after all, they can't unhear that information so why not charge it at rates matching the value to them in their conversations with the next company if you end up not coming tot terms?
- caw 13y agoI would think the standard would be a breakup fee. The fee can be orders of magnitudes larger than any time involved (see AT&T & TMobile acquisition)
- joshfraser 13y agoIf you decide to ask for a breakup fee, I'd add a zero or two to your ask. You're risking more than just your time. You're risking educating a competitor who sound like they would be a formidable force if they decided to take your information and build it themselves.