Ask HN: Big company looking to acquire us, I'm terrified

#1

Post by beingacquired » Thu, Dec 09, 2010, 1:21 AM UTC

First, sorry for the anonymous account. NDA etc..

We're a small, boot-strapped (though fairly established) company. The major company that rules our industry is looking at acquiring or investing. We're really naive at these business aspects, we're engineers..

How much do you disclose on the early talks? We have a document prepared with vague but accurate graphs showing our growth, various comments about how awesome we are and our plans for product development.

I'm afraid of looking too keen for a sale, where I know we'd give up control but it would allow us other benefits of major growth. I feel completely lost here, I've read everything I can on HN but it's hard not knowing what to expect. Is it always this terrifying?

I'd love to hear any stories and advice, thanks for any input.

Re: Ask HN: Big company looking to acquire us, I'm terrified

#2

Post by zachallaun » Thu, Dec 09, 2010, 2:10 AM UTC

Lawyer, lawyer, lawyer.

The way you negotiate and approach any deal is going to vary drastically based upon your current situation. As you're not in a position to give away confidential information on HN, you need to speak to someone to whom such information can be given.

I don't know where you are located, but I am under the impression that pretty much every investing hub has lawyers with a focus on startups. I am confident that they will know the ins and outs of acquisitions, and will be able to provide you with advice as to best navigate the deal.

Re: Ask HN: Big company looking to acquire us, I'm terrified

#3

Post by brk » Thu, Dec 09, 2010, 2:12 AM UTC

Hard to give good advice from just the details in your question.

I guess the most important thing to think about is, do you want to be acquired? And if so, what would it take to make you sell? Then, does that number seem at all justifiable from your current trajectory?

Re: Ask HN: Big company looking to acquire us, I'm terrified

#4

Post by Mz » Thu, Dec 09, 2010, 2:22 AM UTC

I have zero experience with this. But I learned a lot about communicating effectively under pressure while very ill and being jerked around by doctors. If I got all emotional, it was just another excuse to dismiss my very real concerns that I might die if they didn't treat me. I had to keep a very cool head at a time when that was enormously challenging due to pain, fear, how sick I was, etc. I found that doing a few minutes of "meditating" just beforehand -- breathe deeply, clear your mind of prejudices, that sort of thing -- was one of the most effective things I could do.

I would also recommend you pick up a copy of "Getting to Yes" if you aren't familiar with it. It is a quick read and research-based. A meatier book is "The Mind and Heart of the Negotiator". http://www.amazon.com/Mind-Heart-Negotiator-Leigh-Thompson/d... But it might be a bit late for that. (EDIT: Both were required texts in a class I had on "Negotiation and Conflict Management".)

Good luck.

Re: Ask HN: Big company looking to acquire us, I'm terrified

#5

Post by daimyoyo » Thu, Dec 09, 2010, 2:31 AM UTC

Talk to the founders of companies in your sector who've been acquired recently. Find out who represented them. Then hire that firm. Selling a company is like going to court. You can do it yourself, but when the other side has trained professionals working for them, it makes sense to have the same level of expertise on your side.

Re: Ask HN: Big company looking to acquire us, I'm terrified

#6

Post by fleaflicker » Thu, Dec 09, 2010, 2:42 AM UTC

I struggled with this too. Just be honest--don't hide anything and don't pretend to be something you're not. If you sell they'll find out anyway.

Negotiating is all about the ability to walk away. Focus on your product. If a sale doesn't happen you shouldn't be crushed. Just continue growing as you planned.

Re: Ask HN: Big company looking to acquire us, I'm terrified

#7

Post by jayzee » Thu, Dec 09, 2010, 2:47 AM UTC

Congrats. I can imagine a hell worse than being acquired!:)

Re: Ask HN: Big company looking to acquire us, I'm terrified

#8

Post by kareemm » Thu, Dec 09, 2010, 2:55 AM UTC

brk wrote: post #3

Hard to give good advice from just the details in your question. I guess the most important thing to think about is, do you want to be acquired? And if so, what would it take to make you sell? Then, does that number seem at all justifiable from your current trajectory?

Agreed. Step 1 is figure out what you want. If you do want to be acquired, do two things:

1- talk to as many smart people you trust who've been in similar situations. ask one or two if you can rely on them as sounding boards as you go through this process.

2- find a lawyer you trust. remember his job is risk mitigation and to protect you from the downside. he's an advisor, not a referee, so take his advice for what it is.

3- enjoy the process - you're gonna learn a lot and life is a marathon, not a sprint.

Re: Ask HN: Big company looking to acquire us, I'm terrified

#9

Post by mikebo » Thu, Dec 09, 2010, 3:14 AM UTC

Watch this great talk by entrepreneur Hadi Partovi on this very subject: http://www.seattle20.com/tv/clip/StartupDay-2010-Exit-Strate...

Re: Ask HN: Big company looking to acquire us, I'm terrified

#10

Post by beingacquired » Thu, Dec 09, 2010, 3:23 AM UTC

daimyoyo wrote: post #5

Talk to the founders of companies in your sector who've been acquired recently. Find out who represented them. Then hire that firm. Selling a company is like going to court. You can do it yourself, but when the other side has trained professionals working for them, it makes sense to have the same level of expertise on your side.

Thanks, this is great advice. We know we'll need a lawyer very soon and I like the idea of working with someone with a history of working with other small tech businesses. It's a comforting thought!