I'll just leave this here as on point of view: http://www.paulgraham.com/corpdev.html
Ask HN: Acquihire early stage bootstrapped SaaS advice
31–40 of 47 posts
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#32I’ve been through M&A twice from the selling side and once from the buying side. You need an LOI before you turn anything over you wouldn’t tell a potential investor. NDA should have been the first thing done before talking in detail. Feel free to reach out if you want to talk confidentially through the process. Edit: if they are keeping the product/tech you should have them value it based on future expectations of v…
Thanks John. I looked up your background and will take your advice to heart. You are correct it is not a strict acquihire. The product will be used /integrated in some form. There is just no real revenue / customer base as of yet.
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#33"I'm open to an offer" is fundamentally unserious and everybody knows it
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#34I would first set a sell price and ask a 15% diposit before due diligence. If due diligence fails, you keep the diposit, if DD succeeds, you get the remaining 85%. This is a good test for good faith and allows you to offset bad faith.
Is this a common practice?
It’s not common but isn’t completely unusual. It can be structured in different ways but is often referred to as a “breakup fee”. My sense is it’s much more common on larger deals than smaller ones, though.
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#35One thing I've said to acquirers in the past is: "You're a big company that can afford to dedicate a person full-time to this deal for months with no impact to your company's focus and bottom line. We're not. I'm excited about this opportunity, can we brainstorm how to limit the cost of exploring this? And perhaps how we could share the cost a bit more equally?"
When we get into brainstorming mode, two things I navigate towards are: time-boxing the exercise (setting and sticking to an condensed schedule) and earnest money from them after some amount of diligence or discussion.
If a suitor can't commit to getting to a handshake/LOI after X weeks, I wouldn't pursue it.
Unrelated advice: try to hack your own brain and your team into believing that the default result of this is "no deal, time wasted". Many/most deals fall through, which can feel pretty brutal if you get optimistic about it.
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#36One thing I've said to acquirers in the past is: "You're a big company that can afford to dedicate a person full-time to this deal for months with no impact to your company's focus and bottom line. We're not. I'm excited about this opportunity, can we brainstorm how to limit the cost of exploring this? And perhaps how we could share the cost a bit more equally?" When we get into brainstorming mode, two things I navig…
[deleted]
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#37The real danger of going through this process is that you will get so enamored with this acquisition that the normal drudge of plugging away becomes uninteresting in comparison. They drag you along, you stop shipping, you stop growing and then they can offer you whatever they want or nothing at all. In the end, I don't think many people are very happy post acquisition, so if you feel good about your product and team,…
I feel like is a common story i hear and yet every time an acquisition goes through and completes and is announced to the public, its all "congratulations" and everyones happy as larry. Maybes its just the whole millions in your bank account that makes it all a happy occasion?
A few million in the bank give you a lot of freedom to do interesting things in the future. I'd definitely take it.
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#38A bit orthogonal to the questions (apologies for that), but leaving the link just in case someone might find it useful: http://www.paulgraham.com/corpdev.html
The tactics you encounter in M&A conversations can be like nothing you've experienced in the otherwise comparatively upstanding world of Silicon Valley. It's as if a chunk of genetic material from the old-fashioned robber baron business world got incorporated into the startup world.
Brilliant!
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#39"I'm open to an offer" is fundamentally unserious and everybody knows it
It's not and they don't.
Re: Ask HN: Acquihire early stage bootstrapped SaaS advice
#40License it to them as a whitelabel reseller (15% commission) with the option to buy? They can go to market with it immediately giving you immediate cashflow with less DD and you are protected by the resell agreement that they can't copy it.
If someone comes to you to discussion purchasing it and you come back at them with a commission reseller deal they're going to think you have no idea what you're doing.