Graduating the incubator, paying back your investors and being acquired has good 'resume equity' - don't overlook the value of that. You can tote that out the next time you're looking for financing or shooting for a C-level gig. I'd take some time to recuperate, and figure out how you want to spend that extra 40 hours a week (suggest spending it on your health and with your loved ones).
Ask HN: Tired founders facing acquihire – please advise
51–60 of 85 posts
Re: Ask HN: Tired founders facing acquihire – please advise
#52Earlier quoted context omitted.
Thanks for the comment. That seems like a good deal to me. Do you have any tips for the negotiation?
If there the acquisition price has a scheduled payout, don't put too much weight on any dollar amount that doesn't get paid out immediately as cash. You could get fired, or decide to quit, post-acquisition on day 2. Know what that means to walk away earlier than planned. Also, having sold a company, I can't stress enough the value of having a good lawyer handle the legal bits. The last thing you wanna be dealing with…
> If there the acquisition price has a scheduled payout, don't put too much weight on any dollar amount that doesn't get paid out immediately as cash.
You actually cannot take this too serious. Often an earn-out depends on achieving certain revenue/ebitda/milestone targets. However, after the acquisition, you will find that someone else is in control over the resources you get (e.g., employees, budget, etc.). In other words, they control the input that you can use to achieve the agreed-upon output.
Thus the acquirer is frequently in a situation where they can manipulate the outcome by simply decreasing the input and thus driving you out of your earnout.
There's people who say that you should not rely on the earnout at all and make a deal ONLY if you would make it based on the immediate payout.
Re: Ask HN: Tired founders facing acquihire – please advise
#53"Is it time to call it quits?" -- Yes, if you're tired now, it's only going to get worse before it may eventually get better. If you have an opportunity to make some money and move in another direction with your life, TAKE IT!
Re: Ask HN: Tired founders facing acquihire – please advise
#54at 18 months, you are either a rocket ship, or should be financially and mentally equipped for the long haul of a 10+ year bootstrapped business.
but it sounds like you are neither, so you should take the offer, and maybe try to get some contingencies in there like a modest signing bonus and health coverage so you are not financially over-stressed on day 1 of starting a new job, which puts the work and yourself at risk.
if they are asking you to work on the same thing, try to get some performance-based bonuses also. it will motivate and rejuvenate you to continue your work (literally).
paying back your investors in full is probably wise, in case you forget all about this fun little experience and decide to do it again (you will).
Re: Ask HN: Tired founders facing acquihire – please advise
#55Are you building a platform or a feature? If you're building a feature and no vision for a platform, then I would suggest to be acquired - however, you need to compensate yourself for your time at market value, and your job should be secured with them too if they are smart and value the experience you gained developing what you have. If you really do have passion but are just burned out, then perhaps figure out who are you missing on your team? Are you missing a business logic person to help guide you and manage resources? Have you created a pitch deck - not just to get more investment - but to get yourself brainstorming and creating a solid plan for the future that you can get excited about? Part of evolving a pitch deck is talking to people to see what they get excited about with it - clients, potential clients, potential investors, etc. I wish you the best.
Re: Ask HN: Tired founders facing acquihire – please advise
#56Get out while you can, your health and time on this planet matters.
Re: Ask HN: Tired founders facing acquihire – please advise
#57The terms of the deal allow us to mostly pay back our investors in full and would line us up with great jobs. It is not the exit we dreamed of but it gives us a nice story for the future and allows us to "wipe our hands clean". Given the amount of stress you are dealing with, this sounds like a good thing to me. You get to undo the damage this has done to your finances, I assume it also would let you get the surgery…
We have been amazingly blessed to get as far as we have so I think I'm hesitant because there is a chance that we can make this work despite my burn out and personal desire for stability. The reasons for accepting would be personal and although we would be able to return most of our investments, this is not what we set out to do. My main fear is limping out of this a few years from now. With the money we have raised,…
If you can pay your investors back in full, surely you'll be taking a decent amount of money off the table as well? Or is their preference crazy relative to yours?
Re: Ask HN: Tired founders facing acquihire – please advise
#58Earlier quoted context omitted.
Thanks for the comment. That seems like a good deal to me. Do you have any tips for the negotiation?
I'm an M&A advisor and my wife has been a PE investor for 10+ years. If your expected payout is $1M+, we might be able to help negotiate (our fee is low digit %'s). My value proposition is simple -> I'll get you more money than you would be able to do on your own and I only succeed if you do. My contact info is in my profile if you're interested.
I hope that means no % taken if you don't get a certain pre-determined amount? They could likely easily get 10-20% more on their own, even if it's structured in some kind of bonus over time; a company's cash is King, so if they can spread out their expenses then that's more easy to swallow.
Edit to add: someone like you may be great and exactly what they need to get through this step of course, I hope they will have a clear enough mind to not make a rash decision.
Re: Ask HN: Tired founders facing acquihire – please advise
#59It sounds to me like this is _exactly_ what you wanted! You're tired, frustrated, don't believe in the product anymore, want to stop working on it, and a bigger company offers to acquire you. That's perfect!
Of course, the acquisition price will usually never be what you wanted, but you've made it further than most, and now get to wear the "I started a company and sold it" belt. Congrats :)
I say take the acquisition, use this as a learning experience, take some time to catch your breath, relax, pat yourself on the back, and try again when you're ready.
Re: Ask HN: Tired founders facing acquihire – please advise
#60[deleted]