The one thing I'd like to emphasize in addition to the good advice here is that they are costing you big bucks in opportunity cost. Your main goal is to launch! They don't seem to be helping with that.
Ask HN: Big company approached our stealth startup – what to do?
71–80 of 84 posts
Re: Ask HN: Big company approached our stealth startup – what to do?
#72-Prioritize the things, discussions should not hamper the product launch.
- Brain storm the Pro/Con of getting acquired
- Write down the options you have and select the best one.
- Once you decide, then dont go back unless and until there is a major advantage
- Hire a Lawyer if you want to pursue further on acquisition.
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Re: Ask HN: Big company approached our stealth startup – what to do?
#73Earlier quoted context omitted.
As a former M&A guy and later a founder - It's not just that your interests aren't aligned in terms of financials or IP, your timelines aren't aligned and your desired outcomes aren't aligned. There is ZERO hurry with a lot of BigCo acquisitions - there are layers and layers of board approvals, analysis, opportunity costs, competitor research, etc. There may not be any actual interest in an acquisition of people or t…
@mblevin completely agree with you. Bigco will take its own sweat time to close, so better focus on product launch and have parallel discussion on acquisition.
Parallel tracks is very tough for a 3 person team and not sacrifice the product.
Re: Ask HN: Big company approached our stealth startup – what to do?
#74I was in exactly the same situation eight years ago. We were acquired pre-launch by a fortune 500 company. It was a disaster. Our company folded two years later, and I believe it was a direct result of mismanagement by the acquirer. The acquisition was not a liquidity event for the founders, so I never made a dime. Never even drew a salary. General advice: proceed with extreme caution. Contact me off line if you want more details.
Re: Ask HN: Big company approached our stealth startup – what to do?
#75It seems "Print the Legend" on Netflix is a good cautionary tale to watch.
Re: Ask HN: Big company approached our stealth startup – what to do?
#76It seems "Print the Legend" on Netflix is a good cautionary and relevant tale to watch.
Re: Ask HN: Big company approached our stealth startup – what to do?
#77Sell and retire young. What's there to think about?
Re: Ask HN: Big company approached our stealth startup – what to do?
#78Figure out if you are talking to a decision maker. A good way to do that is simply ask the person you are talking to "Are you the decision maker?". If you aren't talking to the decision maker, you are wasting your time.
Possibly a less offensive question is "how high would this deal have to go for final sign-off"
This is well said (and understated). Next thing you know you need (them) to "get me that meeting" with the decisionmaker. Er...who do you thin makes those decisions?
Re: Ask HN: Big company approached our stealth startup – what to do?
#79There are some large companies that get deep into technical due diligence, and go as far as signing letters of intent, only to take the ideas and implement the tech themselves. Watch out. Also, NDAs are almost unenforceable. If you don't trust the people across the table, don't share sensitive information.
I'm remembering a post here on HN some time ago from someone that experienced that... Demo'ed their tech to "big co" in the hopes of partnership/acquisition.. nothing came of it then 6 months later Big Co. released their own version of the exact same thing... Be careful.
My startup is currently discussing with a prospect/potential acquirer that was very clear about this: "We'll do it, with or without you, so you'd better accept our under-priced offer".
I'm not aware of any option to prevent any company to do that, is there?
Re: Ask HN: Big company approached our stealth startup – what to do?
#80A dumb questions
What is the reason for being in stealth mode. Is it because you have a novel idea or ground breaking technology or both?