91–100 of 104 posts
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Perhaps different today, but back when I lived in the auld country it was totally different in Scotland (still in the UK, I believe).
As I suspect you know, Scotland has a distinct legal system from England & Wales, and large differences to England in laws around house buying & selling in particular.
> Deciders on M&A [do] not include the VP corp dev or the corp dev managers. Those are good relationships to have, but they don’t initiate large offers. What is corp dev’s role then? Maybe they like an in house recruiter: they conduct negotiations and ease the process by meeting with both parties, but the yay/nay decisions are made by the hiring manager?
No, they're less recruiters or negotiators and more as scouts. They are supposed to go out and find interesting things in (or adjacent to) your space, get to know them, understand how they measure up among their peers and competitors, and bring all that information back to the company. They're all waiting for the company - usually the CEO, CPO, or CRO - to say something like "we have a need for X." Background: I was…
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> 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…
Because we assume, reasonably, that businesses are sophisticated enough to navigate these transactions themselves.
But the volume of deals that happen in the $3-50 million range is very high (especially if you include non-tech companies, like PE's buying up a veterinary clinics or dentist offices) -- this segment of companies generally are not "sophisticated" re: M&A by any means.
To be fair this article is talking about a $100m+ transaction, so maybe that's the segment your head is in. I'm coming at it from the perspective of a < $50m transaction.
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Because we assume, reasonably, that businesses are sophisticated enough to navigate these transactions themselves.
If you're talking large M&A transactions where you have bankers and investors and advisors and a well built out team supporting the entire transaction process, absolutely. But the volume of deals that happen in the $3-50 million range is very high (especially if you include non-tech companies, like PE's buying up a veterinary clinics or dentist offices) -- this segment of companies generally are not "sophisticated" r…
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As a seller, not going exclusive is an absolute PITA. Based on anecdotal experience, I'd bet that most of the "50% of signed LOIs" don't actually close because the seller misrepresented themselves. > There’s an extreme power imbalance in favor of acquirers. Buyers do NOT like dead deal fees (it doesn't get paid out of the LP fund), so there is little incentive for them to play games there. So, no, this is not true.
> So, no, this is not true. I don’t think you’ve provided any evidence other than “buyers like to make as much money as possible at others expense” which everyone knows to be true which doesn’t bear much weight on a skewed power balance existing.
What's your proof that a skewed power balance exists? Just because buyers have experience buying 100s of companies? Well then my experience advising 500+ companies tells me otherwise. So who's right?
Also, you're saying there is a power imbalance because. I was specifically commenting on that power imbalance affecting the poor (50%) success rate.
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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…
You've got your arrow of causality backwards. People dislike it because it's a useless framework when taken in the simplistic way you've presented it.
The actual concept doesn't say that you can only make a profit by stepping on people's heads. It says you can't profitably do the same thing in a market forever. You have to introduce new and better products, which you can profit from until your competitors catch up.
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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.
> People often get into startups because of the chance for a pot of gold at the end of the rainbow. At least someone's finally honest about it. Startup culture is in general a blight.
Yeah, I'm a bit burnt out on startups personally. They tend to give somewhat mediocre compensation, and they give you a bunch of shares with some bloated arbitrary value number to make up for it. Obviously it would be awesome if those shares end up being as valuable as they claim it is, but honestly it just kind of feels like lottery tickets. Most startups don't end up becoming the next Amazon or Apple, and as such t…
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Yeah, I'm a bit burnt out on startups personally. They tend to give somewhat mediocre compensation, and they give you a bunch of shares with some bloated arbitrary value number to make up for it. Obviously it would be awesome if those shares end up being as valuable as they claim it is, but honestly it just kind of feels like lottery tickets. Most startups don't end up becoming the next Amazon or Apple, and as such t…
I think startups and venture capitalism is destroying the economy. I think this is pretty clear qualitatively, but I'd also like to start investigating it quantitatively.
I suspect a place to start investigating would be to try and find the number of dollars being spent by the VC firms in relation to how many startups go belly-up. It certainly feels like startups are more volatile than ever but I don't have any data proving that.
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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…