Don't Talk to Corp Dev • Hacker News Board

Re: Don't Talk to Corp Dev

#201

Post by TheOtherHobbes » Tue, Jan 13, 2015, 8:47 PM UTC

AndrewKemendo wrote: post #100

hyperliner wrote: post #82

Earlier quoted context omitted.

This is unrealistic. There are many startups that are worthless (product is terribly architected, teams don't get along, they cannot track their customers revenue, etc.). A company cannot be expected to offer money for something without some minimum level of due diligence. again, if you absolutely are not selling, then say that and move on.

There are many startups that are worthless ... again, if you absolutely are not selling, then say that and move on. Except the problem is, most founders have a "I wouldn't sell for $X but would for $Y" and the harsh terms for discussion immediately let the founder find out if CorpDev is 1. Serious not just doing business intel and 2. Willing to pay the right amount. If the firm was totally worthless then generally no…

>If the firm was totally worthless then generally no one would be calling anyway.

Sadly, not so. Especially in a bubble.

Internet history is littered with the wreckage of Big Corps divisions that paid well over the odds for Small Corpses.

Corp Dev may be serious, but that doesn't mean they know what you're worth. No one may know what you're worth - not even you.

But a Corp Dev offer gives you a market estimate, which is the next best thing.

Re: Don't Talk to Corp Dev

#202

Post by nkozyra » Wed, Jan 14, 2015, 12:57 AM UTC

drzaiusapelord wrote: post #198

nkozyra wrote: post #111

As neophyte founders, my partner and I talked to Corp Dev of two top 8 tech companies. In retrospect, I don't think either had any intention of acquisition despite spending months at a time with us. We shouldn't have talked to them, but as I said, we didn't know what we were doing. One of them basically had us reverse engineer our stuff through demos for six months and then abruptly ended contact. We heard through th…

>. One of them basically had us reverse engineer our stuff through demos Why are you protecting them? Name them. It blows my mind that there's so much abuse out there but we're willing to cover for terrible companies.

I'm not protecting them, I'm protecting myself ;)

I said both were "top 8," they both probably top 5. I doubt there's a lot of difference between those companies, frankly.

Look, when you're one of these companies and you can go to 90% of startups and just say "hello" and have them on the verge of sending you their source code, that's a critical tactical advantage.

The lesson is simply - when you get this call, take a breath and realize they're as likely to threaten to sue you as they are to acquire you as they are to let you linger on the hook for months on end. Be upfront, ask explicitly what this is about and where it might be going.

Re: Don't Talk to Corp Dev

#203

Post by lifeisstillgood » Wed, Jan 14, 2015, 1:14 AM UTC

emmett wrote: post #98

lifeisstillgood wrote: post #83

Earlier quoted context omitted.

Can I just clarify, the selling of secondary stock and locking in a million, is that actually having cash in the founders personal bank account, or is that some cash on some future funding event? I seem to remember this as a discussion some years ago - where YC was set against the "keep them hungry" mentality. I am assuming it has not changed?

Secondary stock sales means the founder sells a portion of their stock in the company in exchange for cash today. There used to be a widespread belief in the VC world that you wanted to prevent founders from seeing any cash until the ultimate exit. As negotiating leverage has shifted towards founders this has gone away. It's stupid anyway, since allowing founders to see a little cash up front actually aligns incentiv…

Thank you.

Re: Don't Talk to Corp Dev

#204

Post by [deleted] » Wed, Jan 14, 2015, 2:54 AM UTC

peterjancelis wrote: post #69

I think the more important advice is: If you do talk to corp dev, insist on a breakup fee upfront, payable if no minimum price has been offered: "We can talk but I am looking for at least $xxx million and will need $xxxK / $x million if you walk away during or after due diligence, to compensate for my time." It's only without a breakup fee that Corp Dev can smoke you out...

[deleted]

Re: Don't Talk to Corp Dev

#205

Post by yourapostasy » Wed, Jan 14, 2015, 3:42 AM UTC

LargeCompanies wrote: post #156

yourapostasy wrote: post #154

Earlier quoted context omitted.

The key is not the reporting chain as much as who has operational control of budgetary decision making. It far easier to find out who reports to whom than who really wields the check writing power, and how big a check they can write before they have to get someone else's approval. Right now, you have yet to open source and still have the potential to out-compete the Big Name. That is worth potential income in the fut…

Thanks, but lawyers cost money and that resource is lacking for us. We tried and tried and tried to get out to the valley and via an incubator(YC or TechStars), but all we could get to help us are local incubators. We greatly appreciate their backing, but they do not have the backgrounds/experience/networks a YC or TechStars has to thoroughly help us. THough there are some people in this east coast town who could hel…

Most attorneys will listen for 15-30 minutes in a free phone meeting, enough to tell you in general terms how likely you will need their expertise; that is, how much hot water you are getting yourself into. Your braintrust (incubator, mentors, advisers, board) would at least have known about that; that is basic business knowledge. Either communications has broken down badly between your braintrust and you/your team, or I'm missing critical pieces of the picture.

Your public persona is a resource to be husbanded and crafted as carefully as your codebase and/or finances. If you plan on open sourcing your code, exiting the entire sector you are operating in and never intending to come back, then there isn't much Big Name can do to you even if they felt like it, as long as your wording was careful. Go ahead in that case, and burn down that persona for that space. But never is a long, long time. And this industry is still really, really small when you look at those you want to work with in a specialty.

If you intend to continue in your specialty, then I would take some time off, decompress, and figure out what is really important to yourself. The fact that this style of arguably unethical behavior is abundant and a regular feature of the corporate landscape is already out there now, via this thread and meta-discussions reverberating out there; while it can be emotionally satisfying to divulge details, make no mistake, there will always be a cost attached. Just be certain you are willing to pay that cost.

If you have any direct competitors in your space, and your space is very small, you can mention to them that Big Name is fishing for both technical and market intelligence details by posing as potential acquirers, and to be careful what is said around them. You don't need to mention your gaffe. If the space is small enough, then that will have the effect of freezing out Big Name on any future fishing expeditions. That is likely to have a bigger, more focused effect that has direct beneficial bearing upon your activities than trying to generally name and shame them out in the open.

Re: Don't Talk to Corp Dev

#206

Post by rpwverheij » Wed, Jan 14, 2015, 9:54 AM UTC

thank you pg

Re: Don't Talk to Corp Dev

#207

Post by LargeCompanies » Wed, Jan 14, 2015, 8:21 PM UTC

yourapostasy wrote: post #205

LargeCompanies wrote: post #156

Earlier quoted context omitted.

Thanks, but lawyers cost money and that resource is lacking for us. We tried and tried and tried to get out to the valley and via an incubator(YC or TechStars), but all we could get to help us are local incubators. We greatly appreciate their backing, but they do not have the backgrounds/experience/networks a YC or TechStars has to thoroughly help us. THough there are some people in this east coast town who could hel…

Most attorneys will listen for 15-30 minutes in a free phone meeting, enough to tell you in general terms how likely you will need their expertise; that is, how much hot water you are getting yourself into. Your braintrust (incubator, mentors, advisers, board) would at least have known about that; that is basic business knowledge. Either communications has broken down badly between your braintrust and you/your team,…

Thanks, so we feel based upon that meeting and all the subsequent large companies (Fortune 50 to 500) who then reached out after we have created something extremely special.

Basically it's BlueTooth/BlueTooth Audio on Steroids via the web. Sync 100s to 1000s of IP devices together via a URL to play/control audio, video & or any media in unison on all devices.

Tons of software & hardware innovation will happen in this space, we've already created a few apps using our sync technology.

We just need the right people... their networks and money behind us! We have yet to been to accomplish such and we have shouted and waved our hands telling this story to those who can help, but it falls on deaf ears.

Once and if we open source this tech, we think doing such and then the community further developing will have a big impact on any company that currently uses BlueTooth and or has their own syncing standard.

ALL I WANT TO DO IS INNOVATE AND BE FAIRLY COMPENSATED FOR IT. I feel I have a knack for it based upon my history and all noted here.

Re: Don't Talk to Corp Dev

#208

Post by yourapostasy » Thu, Jan 15, 2015, 5:26 AM UTC

LargeCompanies wrote: post #207

yourapostasy wrote: post #205

Earlier quoted context omitted.

Most attorneys will listen for 15-30 minutes in a free phone meeting, enough to tell you in general terms how likely you will need their expertise; that is, how much hot water you are getting yourself into. Your braintrust (incubator, mentors, advisers, board) would at least have known about that; that is basic business knowledge. Either communications has broken down badly between your braintrust and you/your team,…

Thanks, so we feel based upon that meeting and all the subsequent large companies (Fortune 50 to 500) who then reached out after we have created something extremely special. Basically it's BlueTooth/BlueTooth Audio on Steroids via the web. Sync 100s to 1000s of IP devices together via a URL to play/control audio, video & or any media in unison on all devices. Tons of software & hardware innovation will happen in this…

If you go the open source route, then you will likely derive revenue from consulting and support activities. Modifying the open source code for specific requirements and applications, fixing bugs for paying customers, that sort of task.

If you are more into the tech than the business angles, then you could keep it closed source, create various platforms around it, and license the platforms. The F50-500 companies have already told you their likely use cases, even big wig himself probably revealed what they want to use it for. Instead of packaging the technology unto itself, create the interface to the use case, then license that integration package as a whole unit.

If they want to sync under a WebSphere stack, hold your nose if you aren't into the enterprisey stuff, dive into J2EE, build out as complete an integration to your tech as you can, then license that entire solution. You could do an end-run around big wig's team by making it feasible to get to a solution faster than his team could by themselves, since you only have to create the integration, and they have to build and refine the tech from the ground up and then do the integration. By the time they finish (if they finish at all), you are onto the next use case, and the next integration.

If you aren't relying upon this tech to put food on the table today, then you have nothing to lose by doing much of the integration work for your customers, and bridging the gap in the business case to adopt your tech much closer to reality for the business decision makers.

Re: Don't Talk to Corp Dev

#209

Post by LargeCompanies » Thu, Jan 15, 2015, 6:48 AM UTC

yourapostasy wrote: post #208

LargeCompanies wrote: post #207

Earlier quoted context omitted.

Thanks, so we feel based upon that meeting and all the subsequent large companies (Fortune 50 to 500) who then reached out after we have created something extremely special. Basically it's BlueTooth/BlueTooth Audio on Steroids via the web. Sync 100s to 1000s of IP devices together via a URL to play/control audio, video & or any media in unison on all devices. Tons of software & hardware innovation will happen in this…

If you go the open source route, then you will likely derive revenue from consulting and support activities. Modifying the open source code for specific requirements and applications, fixing bugs for paying customers, that sort of task. If you are more into the tech than the business angles, then you could keep it closed source, create various platforms around it, and license the platforms. The F50-500 companies have…

Thanks, but I am not the logic coder of my team. I'm the designer & design coder only.

We could use some more dev/manpower. Everything is written in the latest javascript frameworks like Web Audio API, Node.js and other similar frameworks.

If interested or know anyone who is interested in working on what we feel is game changing, we'd love to chat.