So Close

Its a good post - but it must be said: the CEO (and board?) fucked up hardcore. They let themselves be tempted by acquisition, and then didn't protect themselves or the team in negotiations.

That doesn't sound like a good deal.

They went all-in with the acquisition with no backup plan, and lost.

Ouch. A sadly common outcome of talking to corp dev. http://paulgraham.com/corpdev.html

Agreeing to no-fundraising and exclusivity clauses during a long due diligence process really puts your head in their vise. And once it's there, people within the acquirer will start saying, Hey, we could built this ourselves! Let's run the clock out and kill the competition.

It’s striking how little humility there is in the post. The majority of it sounds like a sales pitch, and I suppose, who can blame them if it is one in disguise?

If I understand the sequence of events properly, the company entered acquisition negotiations and agreed not to solicit other bids during that time. When the acquisition fell apart, the company was out of money and had to stop operations.

If that's correct, it seems to me like it's something they should have known in advance -- if they knew they would be out of money by the end of the year, why would they enter acquisition talks that were planned to last until then?

Either they didn't know when they would run out of money, which is a pretty important thing to know about a startup company, or they decided to bet the company on the assumption that the acquisition would not fail, which was very irresponsible.

An employee named Ben Havilland wrote a comment on the article that's worth reading.