Is the correct answer not "the largest amount that the acquiring company will pay"?
I think that this is a question that is impossible to answer.
Ask HN: How much should a bootstrapped startup ask for an acquihire?
11–20 of 48 posts
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#12If you don't have revenue or customers you shouldn't be looking for someone to acquire you. Chances are, if you had a truly disruptive product and you were in the industry/segment that the acquiring agency worked in they would come to you - but if that was the case you wouldn't be asking the question here.
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#13Most likely $0. If you don't have any traction or investors, what makes you an attractive acquihire target? If it were so easy to throw together a few friends and make a million dollars via acquihire everyone would be doing it instead of applying for a job. Acquihire is 30% about getting a team with proven ability to execute and 70% about paying back investors as a favor or a down payment on maintaining a good relati…
They might have a great technological solution or expertise that the acquihiring company needs. Thus they might be paying for the technology instead of spending time and resources trying to develop it themselves.
Then its not an acquihire.
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#14How much has doing the startup cost you. If you're bootstrapped you've probably both put personal funds in as well as a salary opportunity costs.
Thats your base.
Now you need to find a multiplier for the opportunity you're giving up. Have fun with it. Say you'd think you could sell your company in 2 years for $20M. Say there's a 10% chance of that happening. That $2M. Divide that by number of founders/employees. There's your markup. Maybe you add some padding to leave room for negotiation.
At the end of the day you need to also find some sort of bottom line. How much are you willing to take to give up to take a normal job (noting you're probably locked in for a year or two)? With my business it's enough to pay off my house. Thats the least amount I'd take to sell my business (not a startup, bootstrapped services)
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#15If you have no investors to answer to and very little debt, then there is no number. But here are some factors in play: -Do you still believe in your idea to the extent you want to grind it out and see some serious upside? -If there is serious upside potential and you want to bake that into the price to still see a nice reward then do that. -If you're okay with not pushing through on this startup and realize it's not…
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Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#16Most likely $0. If you don't have any traction or investors, what makes you an attractive acquihire target? If it were so easy to throw together a few friends and make a million dollars via acquihire everyone would be doing it instead of applying for a job. Acquihire is 30% about getting a team with proven ability to execute and 70% about paying back investors as a favor or a down payment on maintaining a good relati…
They might have a great technological solution or expertise that the acquihiring company needs. Thus they might be paying for the technology instead of spending time and resources trying to develop it themselves.
In that case the acquiring company would be coming to them. If there is a pinch point that bad that an unproven technology would be implemented before it has traction, any wind of the technology to fix it would draw mice.
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#17Don't negotiate against yourself. This question is all about how valuable you are to that company. Does hiring the team and getting the technology increase their profits by 10%, 100%, 1000%? How much value are you bringing to the new company? And don't devalue yourself because you aren't VC funded. Don't negotiate against yourself into saying a lower number. Find out how much you think your worth and come with your t…
Fully agree, the bootstrap / vc funding metric is commoditization.
People pay a lot more for 'ancient grains' than 'hard winter red'.
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#18How much has doing the startup cost you. If you're bootstrapped you've probably both put personal funds in as well as a salary opportunity costs. Thats your base. Now you need to find a multiplier for the opportunity you're giving up. Have fun with it. Say you'd think you could sell your company in 2 years for $20M. Say there's a 10% chance of that happening. That $2M. Divide that by number of founders/employees. The…
How much are you willing to take to give up to take a normal job (noting you're probably locked in for a year or two)?
This is very important if your company is already making money/providing you with a salary/dividends.
You're not just being acquihired, but you're essentially losing control of an asset that makes you money. In the wrong circumstances, you could be hired, fired within months, and have no income, so the acquisition needs to be enough to cover thriving through that worst case.
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#19Most likely $0. If you don't have any traction or investors, what makes you an attractive acquihire target? If it were so easy to throw together a few friends and make a million dollars via acquihire everyone would be doing it instead of applying for a job. Acquihire is 30% about getting a team with proven ability to execute and 70% about paying back investors as a favor or a down payment on maintaining a good relati…
They might have a great technological solution or expertise that the acquihiring company needs. Thus they might be paying for the technology instead of spending time and resources trying to develop it themselves.
That's not quite an "acqui-hire", though, that's a technology purchase.
"Acqui-hire" has a strong implication of, "we don't need your technology, and will likely discard/discontinue your product... but we want your engineers, as a cohesive team with relevant domain experience."
Re: Ask HN: How much should a bootstrapped startup ask for an acquihire?
#20Its still 750K - 1.5M per employee, its not like engineers are less valuable if they are bootstrapped. But a better question is given the businesses involved what values change. Does the acquiring company become more valuable? Is there less competition? Is there intellectual property involved? Customer contacts?
A much better way to start this process is to do a fund raising exercise. How much would you expect the company to be pre-money and post-money, and why? If you have been unsuccessful raising money it is possible your post money valuation expectation is too high. At the end of the day though its value not a 'rule of thumb' for these things.
People will use the 'rule of thumb' to cross check the value of their offer. If they feel like they are only in it for the employees and offering more than a 'typical' acquihire they will need to understand why that is. If less then that is another data point.