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

What I learned selling my company

harryglaser.com

Post reply on HN
Print view View original

81–90 of 104 posts

Re: What I learned selling my company

#81

Post by didgetmaster »

guappa wrote: post #64
didgetmaster wrote: post #39

>People often get into startups because of the chance for a pot of gold at the end of the rainbow. Few people will take the chance to join a risky venture if the didn't see some kind of payout down the road. I once left my stable job to join a startup. I took a salary cut and even loaned them money to make paroll. But I got some founders stock and had confidence in the product we were building. It payed off years lat…

You can contribute amazingly and the company can still fail. Equity might be worth 0. You were lucky… but it's not a fault to not want to bet years of work and just sticking to the paid hours.

Of course, there are no guarantees that a startup will be successful. But it wasn't just luck. Myself and others worked hard to create something valuable. If I wanted the safety of a paycheck while working just the minimum hours, I would not have made the leap.

My criticism was of those who join a startup for the chance at a payout but don't want to put in the effort to help make that a likelihood.

Re: What I learned selling my company

#82

Post by lazide »

paulddraper wrote: post #52
cj wrote: post #36

Earlier quoted context omitted.

> it doesn't make much sense to think about protections Why? If I’m going to put my business on hold for 3 months to entertain your offer to buy my company, why would it not make sense to make sure the buyer is serious enough to offer something they shouldn’t need to ever pay out if they are serious about their offer? > structure the dealmaking or negotiate the deal to get what you want. You usually have lawyers doin…

tptacek was referring to mandatory legal protections. Typically, those are only created for unsophisticated parties who don't know what to negotiate for. --- > If I’m going to put my business on hold for 3 months I've had a failed LOI before (as a seller). Very rarely should an LOI ever fail after 3 months of exclusivity. The LOI is "hey we'd like to dig deep into this, but we want to be sure we aren't wasting our ti…

I’ve anecdotally heard of sellers being strategically strung along to distract them/tie them up, to help their portfolio company get additional market traction.

This is by some less than ethical Chinese investors.

That said; it could also be (unsuccessful) sellers remorse.

Re: What I learned selling my company

#83

Post by lazide »

linuxdude314 wrote: post #79
cj wrote: post #36

Earlier quoted context omitted.

> it doesn't make much sense to think about protections Why? If I’m going to put my business on hold for 3 months to entertain your offer to buy my company, why would it not make sense to make sure the buyer is serious enough to offer something they shouldn’t need to ever pay out if they are serious about their offer? > structure the dealmaking or negotiate the deal to get what you want. You usually have lawyers doin…

You don’t suspend bizops because you’re selling a business. That sounds like a great way to cause your biz to not sell at all.

Having the owners distracted can cause marginal businesses to implode/slow down. At a minimum it’s almost always distracting from something important.

Is that business valuable in that case? Probably a lot less than they’re trying to get for it, for sure hah.

But it can happen.

Re: What I learned selling my company

#84

Post by karmelapple »

didgetmaster wrote: post #81
guappa wrote: post #64

Earlier quoted context omitted.

You can contribute amazingly and the company can still fail. Equity might be worth 0. You were lucky… but it's not a fault to not want to bet years of work and just sticking to the paid hours.

Of course, there are no guarantees that a startup will be successful. But it wasn't just luck. Myself and others worked hard to create something valuable. If I wanted the safety of a paycheck while working just the minimum hours, I would not have made the leap. My criticism was of those who join a startup for the chance at a payout but don't want to put in the effort to help make that a likelihood.

> But it wasn't just luck.

Agreed that success such as yours is not only luck!

But as a co-founder of a SaaS company that has survived over a decade, I would stress that luck* is also part of it.

Many people work very hard at a startup and the thing just crashes and burns, sometimes very quickly. It's not just hard work and being competent at your job - other things outside of your control or influence have to happen to align, too.

* I think "luck" is a pretty good descriptive word for things outside of your control and influence going your way.

Re: What I learned selling my company

#85

Post by lazide »

didgetmaster wrote: post #81
guappa wrote: post #64

Earlier quoted context omitted.

You can contribute amazingly and the company can still fail. Equity might be worth 0. You were lucky… but it's not a fault to not want to bet years of work and just sticking to the paid hours.

Of course, there are no guarantees that a startup will be successful. But it wasn't just luck. Myself and others worked hard to create something valuable. If I wanted the safety of a paycheck while working just the minimum hours, I would not have made the leap. My criticism was of those who join a startup for the chance at a payout but don't want to put in the effort to help make that a likelihood.

Most people want to get rich quick/easy, so it’s quite hard to actually do so (there is a lot of competition).

It’s dumb to want to get rich unnecessarily hard (‘overpaying’ in effort for the actual outcome).

Somewhere in the middle is a good trade off. A big part of being a founder is finding the right people to contribute to make it a success.

There are a lot of freeloader/non-effective types, everywhere.

Big corp and gov’t often has no choice but to accept them, but not so for startups.

The founders ultimately are responsible for who they hire and what they produce.

Re: What I learned selling my company

#86

Post by karmelapple »

ramraj07 wrote: post #47
jahewson wrote: post #45

Earlier quoted context omitted.

Don’t sell your company for less than your investors have agreed it’s worth.

I don’t understand how it’s a hard floor though. Is there a contractual limit when you get a funding round?

Even if there isn't a contractual limit, I think this is a pretty easy logic problem for an engineer (such as myself):

If a stock costs $10, and I spend $100 to buy 10 shares of that stock, I don't want to sell that stock if it's worth less than $10.

Will I consider taking the loss? Maybe... but I will probably be unhappy with it, so I will do everything in my power to wait to sell until the stock is worth more than $10 again.

Re: What I learned selling my company

#87

Post by lazide »

mcmcmc wrote: post #77
greenhexagon wrote: post #42

Earlier quoted context omitted.

This is more like, a gross oversimplification of the first chapter of a freshman intro to economics. This is to economics what "assume the cow is a perfect sphere moving on a frictionless surface without wind resistance" type of problem is to physics. In the real world, profit absolutely does not correspond to "taking advantage" or "extracting value through arbitrage".

Just because you dislike it doesn’t mean it’s not a useful framework. And yes, it does come up in first year econ classes, as well as in advanced courses that study the history of economic thought. If you bothered to read the linked page or do your own research on “economic profit” you would realize that the “normal profit” you’re thinking of is a distinct subject. Edit: also keep in mind that literally all of econom…

The implicit assumption you seem to have here is that building the “machinery” to get to the point of a “frictionless”/perfect markets is not fundamentally valuable to everyone.

The implication in fact is that it’s immoral to be ‘paid’ for doing so?

I’d argue that just makes the world a poorer place overall, as there is no direct incentive to do things better. In the typical environments this plays out, there is actually a lot of incentive to do things worse.

Cost plus is one way of doing this kind of thing, and that gives strong incentives to inflate costs, for instance.

gov’t budgets are another, and anyone who has worked in the government or other large organization knows you’d better spend your budget each year or you’ll lose it. So no one ever has any left over short of something crazy happening.

Re: What I learned selling my company

#88

Post by paulddraper »

lazide wrote: post #82
paulddraper wrote: post #52

Earlier quoted context omitted.

tptacek was referring to mandatory legal protections. Typically, those are only created for unsophisticated parties who don't know what to negotiate for. --- > If I’m going to put my business on hold for 3 months I've had a failed LOI before (as a seller). Very rarely should an LOI ever fail after 3 months of exclusivity. The LOI is "hey we'd like to dig deep into this, but we want to be sure we aren't wasting our ti…

I’ve anecdotally heard of sellers being strategically strung along to distract them/tie them up, to help their portfolio company get additional market traction. This is by some less than ethical Chinese investors. That said; it could also be (unsuccessful) sellers remorse.

Acquisition by competitor is a quite dicey affair...beyond a concern for resources, the information transfer itself is also concerning.

Re: What I learned selling my company

#89

Post by lazide »

paulddraper wrote: post #88
lazide wrote: post #82

Earlier quoted context omitted.

I’ve anecdotally heard of sellers being strategically strung along to distract them/tie them up, to help their portfolio company get additional market traction. This is by some less than ethical Chinese investors. That said; it could also be (unsuccessful) sellers remorse.

Acquisition by competitor is a quite dicey affair...beyond a concern for resources, the information transfer itself is also concerning.

Yup. Also a common situation.

Re: What I learned selling my company

#90

Post by brianwawok »

sokoloff wrote: post #54
zik wrote: post #25

Earlier quoted context omitted.

Coming from Australia the way London house sales work seems like such a complete disaster. It seems like you can make your buy contingent on selling your old house, which creates chains of buys and sells which fail the instant anyone pulls out. I can't imagine how anyone can operate in that environment.

You can make your offer contingent on selling your old house (or on an inspection, or anything else you want). Sellers are also free to not accept such offers. Both of my house purchases were from submitting a no financing contingency offer with significant earnest money, and I think that helped me win both bids.

Yes, for sure. Even if you are coming in 10k or 20k under others, having a 0 contingent offer is so much more clean and more likely to get approved. My last offer I went even further and added a note "I know both the roof and HVAC are old and ruined, I will not ask for either to be fixed as part of closing" and I won the house despite not being the highest bid.
Post reply on HN