31–40 of 84 posts
if you want it to not happen again, you have to name names. otherwise, there's no downside to this company.
They're not naming names because they value the lesson more than the temporary shaming.
All is not lost, and the start-up shouldn't despair, for a couple of reasons: 1. It's not unknown for acquisition deals to get put on the back burner for a while, even a year or two. That happened to my former company when it was acquired. (This history was publicly disclosed in my company's proxy filing with the SEC [1].) 2. The Company's lawyers are likely to tell them, forcefully, to be very careful about trying t…
I seriously doubt it.
> In a somewhat-similar situation in the mid-1990s, Rockwell International got tagged by a jury for almost $58 million for breach of an NDA concerning circuitry for improving data transmission rates over analog cell phones.
What fraction of revenue was that? For a semi firm, that sounds like small-cost-of-doing-business when compared to cell-phone revenues.
This sort of scenario is unfortunately very common. The antidote is never to allow acquisition talks to be the main thing you're focusing on. We advise startups who get approached by acquirers to treat it as a background process, and not to take things seriously until the very last stage. If acquisition discussions are just a side show, you can easily terminate them if anything goes wrong. Which, interestingly, proba…
> M&A guys can smell it when you really want a deal, and that makes them want it less. This seems perverse, but I'm guessing that there's some kind of economic intuition these guys have gained from being around deals all the time? Something like, "Wants a deal == needs it == a bad investment." This just seems to confirm that the best way to get money thrown at you is to not have a need for it.
Law of the jungle: If it runs, chase it. If chased, run.
OK, I understand that model and I can see the sense in it, but does it not set up a situation where the start-up is so dependent on some one buying them up that they can get over keen once potential buyers circle, resulting in them becoming vulnerable to the iffy behaviour of bigger businesses.
Seems to be a critical point in the business, where the founders can run in to trouble, for reasonable human reasons. Perhaps some sort of help is required in this area?
Earlier quoted context omitted.
So you're intelligent if you don't demand an NDA?
Not quite. It's more like: You're not intelligent if you think an NDA is worth a damn (as the article shows.)
When you're dealing with lying buggers though, it represents an option to sue. Insurance is similar.
if you want it to not happen again, you have to name names. otherwise, there's no downside to this company.
Any downside for the company would be so short-lived it wouldn't be worth it. Like most ragefests, it'd die down at the next controversy and be forgotten. They're not naming names because they value the lesson more than the temporary shaming.
Having seen a startup in Austin, TX go through this same kind of thing, I would guess its more common than the author makes it sound here. The best defense is to build a technology that isn't cheap to reproduce. There is no better moat than killer IP.
All is not lost, and the start-up shouldn't despair, for a couple of reasons: 1. It's not unknown for acquisition deals to get put on the back burner for a while, even a year or two. That happened to my former company when it was acquired. (This history was publicly disclosed in my company's proxy filing with the SEC [1].) 2. The Company's lawyers are likely to tell them, forcefully, to be very careful about trying t…
Hint: This is when you say I can do that for X months in exchange for Y breakup fee if this deal falls though.
PS: You can still increase Breakup fee's later in the process, but this is little reason to stop talking to stop considering other offers without being paid to do so.