Something not mentioned but which is very important is the price anchoring that happens once you get a serious figure out of corpdev.
Future talks will be anchored on the initial figure regardless of your success in the meantime.
Don't Talk to Corp Dev
161–170 of 209 posts
Re: Don't Talk to Corp Dev
#162Earlier quoted context omitted.
Out of a link from the essay[0]: >Do not enter acquisition talks unless you are ready to sell your company. Negotiating an acquisition is the most distracting thing you can do in a startup: going through M&A is an order of magnitude more distracting than raising money. All of your ability to run the day-to-day operations of your company will grind to a halt. You should only enter an acquisition process if 1) you are…
Yes, easier said than done. Suppose I am a cofounder of WhatsApp. We just booked 10M[0] in revenue and are seeing a lot of success. I'm pretty proud of myself and see big things for WhatsApp. Though really, my ultimate goal is to compete with Elon Musk putting humans on Mars. I figure I need a few Billion to do that. But that's just a dream. Facebook "corp dev" comes knocking. I read the news and see they bought Inst…
In this particular case, I can almost guarantee that the reason the deal ended up this huge is that the founders absolutely, positively didn't want to sell, and especially not to facebook. And facebook had to literally make them an offer they could not refuse (in the sense of the amount of money for every employee... not as in the Corleone sense).
You can glean some idea of why that was from this public information https://blog.whatsapp.com/245/Why-we-dont-sell-ads. This is in direct voice of Jan Koum, the founder and CEO of whatsapp. That gives you some idea of his personality and it's an entirely accurate one. I'll be willing to bet large amounts of money that the Zuckerberg himself had to engage in a full court press before getting a response at all.
Re: Don't Talk to Corp Dev
#163Earlier quoted context omitted.
> and a non-hire agreement that stops them from poaching your employees. Isn't that similar to what Google/Apple/etc were doing recently, and were rightfully lambasted for? My employer does not own me, they should have absolutely no say over what company can offer me a new position.
I believe non-poaching agreements between companies discussing an acquisition would be less inclined to harm employees than the agreements you mention. A non-solicit in this case would be unilateral, and not the bilateral agreements that Google et al had.
Isn't it unilateral in the direction that hurts the employee? If your startup signs a no poaching agreement with Google. Now Google can't give you a higher salary offer.
I don't think I see how this would not hurt the employees. Seems like a classic startup management move that screws over the employees who are already taking pay cuts and huge life risks to make the startup successful.
Re: Don't Talk to Corp Dev
#164Earlier quoted context omitted.
.. merely about the revenue it was going to add to their bottom line. In the business domain, is there really anything else to care about? If there is, I have yet to see it in my 25+ years in software development.
>In the business domain, is there really anything else to care about? Unless you are a sociopath, the wellbeing of your employees and customers.
Unless your business is making money, you won't have any employees or customers.
I can agree with your sentiment, but that's all it is I'm afraid, at least according to my experience.
Re: Don't Talk to Corp Dev
#165Earlier quoted context omitted.
>In the business domain, is there really anything else to care about? Unless you are a sociopath, the wellbeing of your employees and customers.
Unless your business is making money, you won't have any employees or customers. I can agree with your sentiment, but that's all it is I'm afraid, at least according to my experience.
Businesses that can't manage both at the same time should not exist at all. Bankruptcy and liquidation is a perfectly fine solution for businesses that can only break even by screwing their customers and/or employees. I wish more of them would take it.
Re: Don't Talk to Corp Dev
#166I think this is good advice, especially considered that corp dev could also be seen as a kind of corporate espionage program.
I had the same thought when I started reading, but didn't see any overt references to this. I am quite curious: has anyone around here experienced a case where it seemed like the objective wasn't to acquire/hire at all but to derail, tar-pit, or gather intel? I can imagine this happening if the approaching company is a direct competitor or is thinking of entering the space.
I imagine that corp dev would probably get enough info to determine if the company would be better off building or buying to get in whatever space they want to enter. What happens after that I suppose depends on the company.
The other side is if you could get enough information about customer acquisition or some of the metrics that govern the business, you could likely jump ahead of where you would be if you build from scratch without having to learn from time and experience.
Re: Don't Talk to Corp Dev
#167Earlier quoted context omitted.
Yeah we filed our provisional 30 minutes prior to this meeting. It is now a patent-pending.
On a cautionary note, and while I'm not a lawyer... Any patent is at risk of invalidation, and disputes become a battle of resources. At the same time, the provisional does at least help establish your freedom to use your own invention.
They don't even need to invalidate the patent, they can just run the lawsuit out for decades and most likely get the patent holder to settle for a pittance.
Re: Don't Talk to Corp Dev
#168Earlier quoted context omitted.
I believe non-poaching agreements between companies discussing an acquisition would be less inclined to harm employees than the agreements you mention. A non-solicit in this case would be unilateral, and not the bilateral agreements that Google et al had.
Isn't it unilateral in the direction that hurts the employee? If your startup signs a no poaching agreement with Google. Now Google can't give you a higher salary offer. I don't think I see how this would not hurt the employees. Seems like a classic startup management move that screws over the employees who are already taking pay cuts and huge life risks to make the startup successful.
Think of it from the other direction - if the agreement didn't exist, the startup wouldn't even talk to the bigger company, potentially hurting the employee and everyone else in the company.
For a startup, losing a key employee is a big deal and a big risk. A non solicitation agreement doesn't prevent the employee from applying for a job at the bigger company, but merely allow the startup to be more open t o a potential competitor.
Re: Don't Talk to Corp Dev
#169Earlier quoted context omitted.
Isn't it unilateral in the direction that hurts the employee? If your startup signs a no poaching agreement with Google. Now Google can't give you a higher salary offer. I don't think I see how this would not hurt the employees. Seems like a classic startup management move that screws over the employees who are already taking pay cuts and huge life risks to make the startup successful.
Think of it from the other direction - if the agreement didn't exist, the startup wouldn't even talk to the bigger company, potentially hurting the employee and everyone else in the company. For a startup, losing a key employee is a big deal and a big risk. A non solicitation agreement doesn't prevent the employee from applying for a job at the bigger company, but merely allow the startup to be more open t o a potent…
Maybe the startup should stop the whining and compensate its key employees a little better then.
Re: Don't Talk to Corp Dev
#170Love to tell my horror story re: my experience dealing with a Fortune 50 company. Under a NDA til May. We are an east coast start-up and two months into creating our tech/product a large entity in the valley found out about us. This big name invited us out and talked about buying us. Well we have zero strong connections to such people like Paul Graham, but we did reach out to our network. They said, "I don't know if…
It was better for us, they didn't have engineers skilled enough to understand what we were saying and asked for a second meeting with their top notch tech people. But I've smelled something fishy and just forcefed them with top grade tech-looking bullshit under very heavy pressure. Top notch tech folks were confused, corp dev guys were pissed off, but they didn't have a nerve to ask "just repeat what did you say in t…
Yeah, you got lucky
But the part about them not understanding what you did doesn't surprise me in the least