Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Early startup valuation for acquihire?

news.ycombinator.com

Post reply on HN
Print view View original

11–20 of 48 posts

Re: Ask HN: Early startup valuation for acquihire?

#11

Post by vonklaus »

late2part wrote: post #2

Here's some advice: The word "fair" stopped making sense in kindergarten. You don't get what's fair or what you deserve, you get what you negotiate. Now, having said that, you have to determine your goals and how to synthesize an ideal set of negotiating levels. Typically these levels are: 1. Possible Best Case 2. Likely negotiated agreement 3. Worse you'll take (walk away below) 4. BATNA - Your "Best Alternative to…

This seems like a good answer. I would add that you should be somewhat tactful until you have a suggestion of terms. The "give us a number" doesn't seem serious and it would be wise not to release financials, code and strategy until things become serious and it is evident they are negotiating in good faith.

edit: I had a total brain malfunction as pointed out below. Do not be candid, use skepticism and protect your private information.

Re: Ask HN: Early startup valuation for acquihire?

#12

Post by etsll »

jkarneges wrote: post #10

Start with alignment and worry about compensation afterwards. You don't ask for co-founder equity without a strongly shared vision. However, if they are not that interested in your product or technology, are you guys even on the same page?

I probably explained that poorly. What I meant was that our products are so similar, and vision so aligned, that we have already independently developed many of the same technologies.

Re: Ask HN: Early startup valuation for acquihire?

#13

Post by etsll »

late2part wrote: post #2

Here's some advice: The word "fair" stopped making sense in kindergarten. You don't get what's fair or what you deserve, you get what you negotiate. Now, having said that, you have to determine your goals and how to synthesize an ideal set of negotiating levels. Typically these levels are: 1. Possible Best Case 2. Likely negotiated agreement 3. Worse you'll take (walk away below) 4. BATNA - Your "Best Alternative to…

Thank you for that feedback. "Walk Away Before" and BATNA seem easiest to figure out, so maybe I'll start by determining that.

My company is just me. They have 4 founders and will be hiring 5-10 people soon.

Both companies had successful crowdfunding campaigns but neither is shipping a product yet.

Re: Ask HN: Early startup valuation for acquihire?

#14

Post by etsll »

pbiggar wrote: post #8

It all depends on the circumstances. Is "early-stage" mean they have $1m in the bank, or $10m, or $100m? Do they _need_ you, or are interested in a hire? I think if they're early stage enough that you might get 10-20% (btw, 10% is optimistic), then there's no cash available (apart from a small signing bonus like 10-20k). But really, you need to talk through the actual numbers with someone who has been more of an idea…

I believe they have $1M-$2M.

I don't have advisors. Thank you very much for offering to help! I'll send you an email.

Re: Ask HN: Early startup valuation for acquihire?

#16

Post by cpncrunch »

late2part wrote: post #2

Here's some advice: The word "fair" stopped making sense in kindergarten. You don't get what's fair or what you deserve, you get what you negotiate. Now, having said that, you have to determine your goals and how to synthesize an ideal set of negotiating levels. Typically these levels are: 1. Possible Best Case 2. Likely negotiated agreement 3. Worse you'll take (walk away below) 4. BATNA - Your "Best Alternative to…

That seems a bit low, for a well-funded company. $1 million per employee is more like the going rate. See for example:

http://www.quora.com/What-is-a-typical-deal-structure-of-an-...

Re: Ask HN: Early startup valuation for acquihire?

#17

Post by Udo »

etsll wrote: post #13
late2part wrote: post #2

Here's some advice: The word "fair" stopped making sense in kindergarten. You don't get what's fair or what you deserve, you get what you negotiate. Now, having said that, you have to determine your goals and how to synthesize an ideal set of negotiating levels. Typically these levels are: 1. Possible Best Case 2. Likely negotiated agreement 3. Worse you'll take (walk away below) 4. BATNA - Your "Best Alternative to…

Thank you for that feedback. "Walk Away Before" and BATNA seem easiest to figure out, so maybe I'll start by determining that. My company is just me. They have 4 founders and will be hiring 5-10 people soon. Both companies had successful crowdfunding campaigns but neither is shipping a product yet.

> Both companies had successful crowdfunding campaigns but neither is shipping a product yet.

That sounds like you might have to refund some or all of your contributors. After the acquisition, your project will cease to exist. It's unlikely that both crowdfunding promises were exactly the same. Even if the intention is to fold your product into theirs, the realistic outcome is that your employers will ship the product as they intended, leaving your supporters with little to nothing. You need to clean this up now, rather than later.

Re: Ask HN: Early startup valuation for acquihire?

#18

Post by carbocation »

vonklaus wrote: post #11
late2part wrote: post #2

Here's some advice: The word "fair" stopped making sense in kindergarten. You don't get what's fair or what you deserve, you get what you negotiate. Now, having said that, you have to determine your goals and how to synthesize an ideal set of negotiating levels. Typically these levels are: 1. Possible Best Case 2. Likely negotiated agreement 3. Worse you'll take (walk away below) 4. BATNA - Your "Best Alternative to…

This seems like a good answer. I would add that you should be somewhat tactful until you have a suggestion of terms. The "give us a number" doesn't seem serious and it would be wise not to release financials, code and strategy until things become serious and it is evident they are negotiating in good faith. edit: I had a total brain malfunction as pointed out below. Do not be candid, use skepticism and protect your p…

> somewhat candid until you have a suggestion of term

"Candid" here might be a typo or might not be the word you're looking for. "Cautious" seems to be more fitting for what you're saying in the rest of the sentence.

Re: Ask HN: Early startup valuation for acquihire?

#19

Post by perlgeek »

etsll wrote: post #13
late2part wrote: post #2

Here's some advice: The word "fair" stopped making sense in kindergarten. You don't get what's fair or what you deserve, you get what you negotiate. Now, having said that, you have to determine your goals and how to synthesize an ideal set of negotiating levels. Typically these levels are: 1. Possible Best Case 2. Likely negotiated agreement 3. Worse you'll take (walk away below) 4. BATNA - Your "Best Alternative to…

Thank you for that feedback. "Walk Away Before" and BATNA seem easiest to figure out, so maybe I'll start by determining that. My company is just me. They have 4 founders and will be hiring 5-10 people soon. Both companies had successful crowdfunding campaigns but neither is shipping a product yet.

> but neither is shipping a product yet.

I wouldn't call it "bootstrapped", then.

For me, a company is bootstrapped if it makes enough money from its products to sustain itself and its founders/employees.

Re: Ask HN: Early startup valuation for acquihire?

#20

Post by blazespin »

Negotiation is trivial. It's all about your alternative. get another offer or figure out how much you will make going alone. Add about 15%. That's your walkaway ask.

If walkaway trying to get more, you are kidding yourself. That being said, you can ASK for more. Just don't walkaway if you don't get it.

Also, remember the guy who comes up with the ask is usually the chump. Make them make an offer if you can.

Post reply on HN