

What To Do When a Megacorp Wants To Buy You? - saurabh
http://ask.slashdot.org/article.pl?sid=09/05/09/0237237

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gaius
Pay very close attention if they propose actually paying you through an "earn
out". What this means is you go work for them and if you do T task by D date,
then you get paid. But a) that's no different from being an employee and
getting a bonus, so if you wanted to do that why start your own company in the
first place and b) doing T with new constraints A, B and C which only become
apparent once you're committed may be less feasible than you originally
envisaged.

~~~
Confusion
_so if you wanted to do that why start your own company in the first place_

I really don't understand this sentiment. Many entrepeneurs don't found a
company because they don't want a regular job: they found a company because
they have a good idea that they like to work on and there isn't a regular job
that offers that. And because they think they can make a lot more money this
way. Taking the money, while taking more money from MegaCorp for a job where
you can work on what you like sounds like an excellent tradeoff, especially if
you can convince them to let you work under your own rules.

I am very suspicious of people that found companies only because they "don't
want a regular job". There are lots of different regular jobs and many in
which you have lots of responsibility and set/plan your own rules/project.
They come close to a startup. In my book, generalizing 'regular jobs' implies
stupidity.

~~~
fmora
>>I am very suspicious of people that found companies only because they "don't
want a regular job"

Hmmmm... I am thinking is the other way around. Why would people want a
regular job? Think about it, why do you want to work under someone else? Do
you have such a low self esteem that you don't think you can succeed on your
own? Most people get regular jobs because they don't believe they are good
enough to start a company. Hurray for those of us that believe that working on
a regular job is almost the same as being a looser!

~~~
wheels
That's a little too echo-chamber-ish for me. I think most people have "normal"
jobs because either (a) their life doesn't revolve around their work or (b)
it's never occurred to them to found a company.

The first takes a couple forms. During the last two "normal jobs" my life was
focused on open source work and music, respectively. I didn't want to
"monetize" either of them, so the best solution was having a job that was
loosely connected to them and allowed for that (working in the LinuxLab of a
large corporation, and then a pro-audio company, respectively). For a lot of
people it's their families.

The second I think is also pretty common. It just hadn't occurred to me to
start a company until a couple years before I did. Not to mention, that
because of visa requirements, it wasn't possible.

Founding a company has been a great experience, but my life revolves around
that now. For those who do not find that desirable, working for others seems a
fairly sane choice.

------
biotech
For many start-ups, not being sold is synonymous with failure.

So, without knowing any real details... Try to get a good price, and
congratulations.

~~~
electromagnetic
Personally, if it was my first start up, I would sell and test the waters over
at MegaCorp and if it's not how I like it I've always got the money (and
possibly some extra contacts) to jump ship and start my own thing again.

------
jganetsk
Sell.

~~~
wheels
Based on this write-up, that seems short-sighted. It sounds like they've been
given a mediocre valuation for an unfinished product that and it's worth more
to them (and as they feel, the market) than they're being offered. It seems
basically like a talent acquisition more than a tech acquisition, so they'd
probably be stuck there contractually for a good long while, which is what
they founded a company to avoid in the first place.

~~~
pj
The author of the question says, "The money is fair enough..."

His question is one of control, not money. The OP wants to control his life
and his product.

Truth is, products don't last forever. They require maintenance and support,
marketing, infrastructure, pricing, and a whole lot of other things a few guys
focused on development aren't thinking about right now.

A lot of cash in the pocket = a lot of time to think.

I'm not saying they should sell, I'm just saying that I don't understand why
you are bringing money into it when money wasn't a factor for the author.

------
khangtoh
"The money is fair enough"

That I feel roughly translates to the "money wasn't what we expected". A lot
of acquisitions really boils down to the money factor, no startup will ever
reject a good offer, since that's pretty much one of most common exit
strategy.

If the money was really "fair enough", then this question wouldn't have been
posted in the first place. So in their case, it's a matter of weighing the
offer vs what they think their startup is worth at this point. So again
negotiation 101, never accept the first accept, reply with a counter offer
with a price that you feel is "fair enough". If they did not take your counter
offer, no harm done, you just keep bootstrapping.

------
rmason
Do you know what percentage of startups bought by big corporations turn out
failures? Probably a much higher number than those that end up successfully
making tens of millions of dollars.

These guys need advice from a seasoned software entrepreneur (or two) what
their particular chances might be,, not from the "peanut gallery" on SlashDot.

There's probably a 75% chance they should in the words of one commenter "take
the money and run".

------
marcofloriano
Don´t Sell. Money is not the best reason to sell. You guys have to achieve
your best, it´s far important than money. So if you feel that you wont reach
your best selling, stay far from they.

