I almost sold Baremetrics for $5M • Hacker News Board

Re: I almost sold Baremetrics for $5M

#11

Post by LeifCarrotson » Fri, Jan 10, 2020, 7:21 PM UTC

jacquesm wrote: post #10

jakozaur wrote: post #2

Hearing many horror stories over backing out at last minute, I wonder why breakup fees and escrow are not more popular in startup world. E.g. if you would like to acquire for $5mln you need to deposit $100k. If you walk out, this is a breakup fee. If startup bails it also have to pay same amount to the acquire.

The typical terms sheet has an 'out' in that any surprises during DD are grounds for annulment without compensation.

Similar to a home purchase...and I imagine that even with an immaculate company or home you can always find something to satisfy that clause and give you an out.

Re: I almost sold Baremetrics for $5M

#12

Post by FpUser » Fri, Jan 10, 2020, 7:21 PM UTC

Same thing happen to me. Only it was 2 mil instead of 5 and I did not really have to do any due diligence as I was selling my product, not my company. So other then spending some time and paying couple of grand to have lawyer go over the agreements I did not suffer much.

But boy, was I disappointed ;(

Re: I almost sold Baremetrics for $5M

#13

Post by jacquesm » Fri, Jan 10, 2020, 7:24 PM UTC

LeifCarrotson wrote: post #11

jacquesm wrote: post #10

Earlier quoted context omitted.

The typical terms sheet has an 'out' in that any surprises during DD are grounds for annulment without compensation.

Similar to a home purchase...and I imagine that even with an immaculate company or home you can always find something to satisfy that clause and give you an out.

Beware of terms that require the target to pay for DD if the deal goes sour.

Re: I almost sold Baremetrics for $5M

#14

Post by meritt » Fri, Jan 10, 2020, 7:27 PM UTC

It's not uncommon for potential acquirers to feign interest in a purchase so they can derail your business for months while your competition (their actual investments) pull ahead.

Re: I almost sold Baremetrics for $5M

#15

Post by verganileonardo » Fri, Jan 10, 2020, 7:31 PM UTC

meritt wrote: post #14

It's not uncommon for potential acquirers to feign interest in a purchase so they can derail your business for months while your competition (their actual investments) pull ahead.

Could you provide examples of that?

Re: I almost sold Baremetrics for $5M

#16

Post by bcrosby95 » Fri, Jan 10, 2020, 7:33 PM UTC

athiercelin wrote: post #4

"In many ways, I feel like my job as CEO and Founder is to absorb all of the insane parts of running a business so my team can focus on building, learning and enjoying their jobs." This is spot on. I would extend to senior leadership in general.

One way I've heard the role of product manager described as is a "shit umbrella".

Re: I almost sold Baremetrics for $5M

#17

Post by meritt » Fri, Jan 10, 2020, 7:35 PM UTC

verganileonardo wrote: post #15

meritt wrote: post #14

It's not uncommon for potential acquirers to feign interest in a purchase so they can derail your business for months while your competition (their actual investments) pull ahead.

Could you provide examples of that?

Sure, Amazon does it all the time to small startups. They fly you into Seattle, setup a fancy meeting with strategy teams and M&A, make you run through a pitch deck, explain every aspect of your business. They take diligent notes until they fully understand your inner workings, they tell you thanks, you'll hear from us soon.

And nothing happens, 6 months later AWS launches your exact product.

Founders need to be extremely careful when talking to potential acquirers. Dollar signs cloud your vision and you need to understand why they're talking to you. It may be genuine interest or it may be deceit in order to gain a competitive edge.

Re: I almost sold Baremetrics for $5M

#18

Post by tyre » Fri, Jan 10, 2020, 7:35 PM UTC

athiercelin wrote: post #4

"In many ways, I feel like my job as CEO and Founder is to absorb all of the insane parts of running a business so my team can focus on building, learning and enjoying their jobs." This is spot on. I would extend to senior leadership in general.

all leadership, generally.

understand enough broader context to set direction, then distill, cut, and communicate what your team needs to know to do the work

Re: I almost sold Baremetrics for $5M

#19

Post by arcturus17 » Fri, Jan 10, 2020, 7:35 PM UTC

bcrosby95 wrote: post #16

athiercelin wrote: post #4

"In many ways, I feel like my job as CEO and Founder is to absorb all of the insane parts of running a business so my team can focus on building, learning and enjoying their jobs." This is spot on. I would extend to senior leadership in general.

One way I've heard the role of product manager described as is a "shit umbrella".

This touches me on a spiritual level.

Re: I almost sold Baremetrics for $5M

#20

Post by paxys » Fri, Jan 10, 2020, 7:40 PM UTC

meritt wrote: post #14

It's not uncommon for potential acquirers to feign interest in a purchase so they can derail your business for months while your competition (their actual investments) pull ahead.

If not derail then just to get a ton of valuable business insight that isn't available publicly. A while ago a large software company dragged us through this process for months, and eventually backed out at the last minute. A short while later they had a complete clone of our service ready for launch.