* Build something that someone will want to buy. Something awesome that solves a real problem elegantly, that's proven itself by garnering users, and that would fit well in an acquirer's business.
* Closely related to that: don't be a giant, money burning machine. Really cool ideas (i.e. unlimited free music) are often implemented with intractable business plans. Being far from profitable will make any buyer think twice about you.
Well, to be honest, I'm working with someone who's got both of those. It's a profitable business. The founder is just looking for a sale at this point. He's actually ready to build another startup, so he wants to sell his current one, now that's it's doing well.
I can only attest to the difference between small-time lawyers and big-time lawyers/trusted advocates of huge companies, who do business negotiations all the time: The difference is huge, and it absolutely makes sense to hire a pro negotiator. It ultimately comes down to price/terms. And an experienced negotiator can make a huge difference there.
For you, it's a once-in-a-lifetime situation. For them, it's daily business. Guess who's better at it.
EDIT: ah well, misread that as "Ask HN". My bad.
P.S.: I personally don't think it makes a lot of sense to have an investment banker as the lead negotiator. They sure do add value in some cases, but most of the issues arising in share purchase agreements are better entrusted to lawyers.
I thought it was a stunning example of "incentive cause bias" (http://vinvesting.com/docs/munger/human_misjudgement.html) that the founder of a "boutique corporate law firm" would recommend that one should pay for the services of a "top M&A attorney" to decide what to do.
This isn't to say it's bad advice, but somehow it would have been more compelling coming from an entrepreneur who had been through this process rather than from the owner of a firm that benefits monetarily from offering this exact service.
If you don't hire the negotiator when you get an offer, when exactly would you do it? It would be pointless to do so after accepting the offer.
Don't ever hire a large large law firm (50+ lawyers). Unless you have tens of millions at stake, to them you'll be nothing but a small fry that they use for associate training. And for that dubious privilege, you'll pay through the nose.
Go with a boutique firm if possible. Those firms are usually smaller, charge less, and have fewer clients so they can do better work for their clients. They're also better capable of addressing the non-legal issues (i.e., quality of life) related to accepting/rejecting the offer.
And don't hire an investment banker. They'll charge you a large percentage to offer you meaningless advice that you're usually better off rejecting.
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[ 3.8 ms ] story [ 45.2 ms ] threadIn my case, we'd been approached.
Guy Kawasaki wrote "The Art of the Start," but I think there's a need for an "Art of the Exit" as well.
However, we already had an investment banker (Quincy Smith) who was able to talk to people on our behalf.
* Build something that someone will want to buy. Something awesome that solves a real problem elegantly, that's proven itself by garnering users, and that would fit well in an acquirer's business.
* Closely related to that: don't be a giant, money burning machine. Really cool ideas (i.e. unlimited free music) are often implemented with intractable business plans. Being far from profitable will make any buyer think twice about you.
For you, it's a once-in-a-lifetime situation. For them, it's daily business. Guess who's better at it.
EDIT: ah well, misread that as "Ask HN". My bad.
P.S.: I personally don't think it makes a lot of sense to have an investment banker as the lead negotiator. They sure do add value in some cases, but most of the issues arising in share purchase agreements are better entrusted to lawyers.
This isn't to say it's bad advice, but somehow it would have been more compelling coming from an entrepreneur who had been through this process rather than from the owner of a firm that benefits monetarily from offering this exact service.
Don't ever hire a large large law firm (50+ lawyers). Unless you have tens of millions at stake, to them you'll be nothing but a small fry that they use for associate training. And for that dubious privilege, you'll pay through the nose.
Go with a boutique firm if possible. Those firms are usually smaller, charge less, and have fewer clients so they can do better work for their clients. They're also better capable of addressing the non-legal issues (i.e., quality of life) related to accepting/rejecting the offer.
And don't hire an investment banker. They'll charge you a large percentage to offer you meaningless advice that you're usually better off rejecting.