
Ask HN: Tired founders facing acquihire – please advise - tiredandseeking
After 18 months of 80+ hour weeks, no weekends, and hundreds of thousands of dollars of opportunity cost income, I am tired.<p>I&#x27;m having a really difficult time making a decision and appreciate any advice the HN community can offer.<p>Here is a quick summary of my situation:<p>A bit over a year ago, I left a high paying corporate job to start a company. For ~6 months, my co-founder and I did not pay ourselves and ran through a lot of our savings. We soon got accepted into a top tech incubator and were able to use their small investment to keep running. After graduating from the incubator and without even really trying, an investment of more than $1 million fell into our laps. Shortly after, a very successful company contacted us about a potential acquisition and after two months of talking extended a &quot;low-ish ball&quot; acquihire offer to myself and my co-founder.<p>I wish we had the momentum and growth to comfortably pass on the offer but the reality is that we have not had much confidence in the business for a while. Even before the investment fell into our lap we considered &quot;pivoting&quot; to an entirely new idea because we were so frustrated with the highly competitive market in which we were operating. The acquiring company now also has plans to enter our market and it would be very difficult to compete.<p>The terms of the deal allow us to mostly pay back our investors in full and would line us up with great jobs. It is not the exit we dreamed of but it gives us a nice story for the future and allows us to &quot;wipe our hands clean&quot;.<p>We have been working 80+ hours weeks without weekends and extremely low pay. My health has been declining (I was recently injured and need surgery but cannot without better insurance) and I had to move away from friends and family. I&#x27;m still young but my savings have essentially run out and I have become somewhat disillusioned by startup life.<p>Is it time to call it quits?<p>Thoughts?
======
soneca
You gave no reason at all to reject the offer. And I cannot think of any too.

How an offer for something not even you believe it is worth something can be
"low ball"??

Unless you have strong signaling that working at the acquiring company would
be a nightmare (more than your current one), sell it now. And consider it
fair!

My impression is that your only hesitation is because you are comparing your
situation to an hipotetical one where you can cash out a huge payoff of "fuck
you money". The situation you dreamed when you founded the startup. Well,
forget it and deal with the facts in front of you. To me, the decision seems
obvious (and I believe you have a great deal of self-awareness to notice it by
yourself once you pass this denial phase of griefing for your business).

Good luck anyway!!

~~~
Danihan
Exactly, obvious decision here. You don't have faith in your own business,
take the offer.

------
PaulRobinson
You need time off. You need surgery and recovery time, and then you need some
more time off post-recovery.

I say this as somebody who has recently returned to work after 2 months away
due to surgery and needing rehabilitation post-surgery that was very
intensive. I'm still feeling burned out, and I'm hoping to take a couple of
weeks out in a month or two to just regroup and gather my energy back.

You need to figure out whether you can take some time out before making a
decision, or if you need to make the decision now and then take the time off.
If the acquiring company won't let you have enough time off (or more depending
on the surgery), well, that's a problem, and you need to talk to your co-
founder about whether you can do it whilst in the company.

The absolute top priority in all of this is your health: you can't pivot, sell
or work for somebody else if you're not well. Deal with the burn out and
surgery as an urgent priority, everything else is secondary.

------
nhangen
Negotiate a small up front bonus, 2-4 weeks of paid vacation in the immediate
future, at a minimum, and then take the deal.

Use the r&r to recharge, and the acquisition to bolster your track record.
Start something new once you vest.

~~~
tiredandseeking
Thanks for the comment. That seems like a good deal to me. Do you have any
tips for the negotiation?

~~~
amorphid
If there the acquisition price has a scheduled payout, don't put too much
weight on any dollar amount that doesn't get paid out immediately as cash. You
could get fired, or decide to quit, post-acquisition on day 2. Know what that
means to walk away earlier than planned.

Also, having sold a company, I can't stress enough the value of having a good
lawyer handle the legal bits. The last thing you wanna be dealing with when
tire & grumpy is trying to find the loophole about how you could get screwed
in a thick jumble of legalese.

Also, drink an emergency beer. You've earned it.

~~~
bald
> If there the acquisition price has a scheduled payout, don't put too much
> weight on any dollar amount that doesn't get paid out immediately as cash.

You actually cannot take this too serious. Often an earn-out depends on
achieving certain revenue/ebitda/milestone targets. However, after the
acquisition, you will find that someone else is in control over the resources
you get (e.g., employees, budget, etc.). In other words, they control the
input that you can use to achieve the agreed-upon output.

Thus the acquirer is frequently in a situation where they can manipulate the
outcome by simply decreasing the input and thus driving you out of your
earnout.

There's people who say that you should not rely on the earnout at all and make
a deal ONLY if you would make it based on the immediate payout.

~~~
keenrodent
Having been through this personally in the past two years, I cannot amplify
this comment enough.

If you have earnout targets based on resources such as headcount, marketing
spending, or anything else not under your control, you either have to
negotiate that the payout is triggered if resources fall, or accept that you
will likely be manipulated out of the money by future resource constraints.

------
jagermo
| I'm still young

This is one of the key phrases. You built something amazing that someone wants
to have. If they set you up with a good job, you should take the offer.

As nhangen said, try to get a long vacation and take it. My recharge tip would
be: Find a nice place to stay for at least 3 weeks. Maybe something with a
beach and all necessary shops in walking distance (if you are in Europe, Paros
is amazing). Stay for at least 3 weeks. The first week will be strange, it's
really hard to come down from a lot of work. The second week will feel better,
you start to relax. The third is bliss - you come down and kind of only wander
between different states of relaxation (wake up, nice breakfast, beach, maybe
a nap, afternoon tea, dinner, sleep). It really helps to get ready for the
next step and gives you enough distance to re-evaluate what you want to do.

------
1001101
Graduating the incubator, paying back your investors and being acquired has
good 'resume equity' \- don't overlook the value of that. You can tote that
out the next time you're looking for financing or shooting for a C-level gig.
I'd take some time to recuperate, and figure out how you want to spend that
extra 40 hours a week (suggest spending it on your health and with your loved
ones).

------
exogeny
Investors will always tell you that they want big multiples on their
investment in order for their fund economics to work. They are right. They
will also however concurrently never, ever be mad at someone for returning
their money. (And in doing so, you'll be able to raise money again, much
easier.)

The harsh criticism against acquihires is mostly reserved for companies who
raise too much, too fast and/or lavishly waste money and opportunities
available to them. That doesn't sound like you at all.

------
traviswingo
It sounds to me like this is _exactly_ what you wanted! You're tired,
frustrated, don't believe in the product anymore, want to stop working on it,
and a bigger company offers to acquire you. That's perfect!

Of course, the acquisition price will usually never be what you wanted, but
you've made it further than most, and now get to wear the "I started a company
and sold it" belt. Congrats :)

I say take the acquisition, use this as a learning experience, take some time
to catch your breath, relax, pat yourself on the back, and try again when
you're ready.

------
Mz
_The terms of the deal allow us to mostly pay back our investors in full and
would line us up with great jobs. It is not the exit we dreamed of but it
gives us a nice story for the future and allows us to "wipe our hands clean"._

Given the amount of stress you are dealing with, this sounds like a good thing
to me. You get to undo the damage this has done to your finances, I assume it
also would let you get the surgery you need and you can stop running yourself
into the ground.

What are you hoping to get if you don't take this? What makes you hesitate to
take it? Are the things that give you pause genuinely realistic scenarios or
issues?

~~~
tiredandseeking
We have been amazingly blessed to get as far as we have so I think I'm
hesitant because there is a chance that we can make this work despite my burn
out and personal desire for stability. The reasons for accepting would be
personal and although we would be able to return most of our investments, this
is not what we set out to do.

My main fear is limping out of this a few years from now. With the money we
have raised, we do have runway for a small team for a few years. But given the
technical maturity of our product, we should really be in growth mode with the
intention to raise a series A in 18 months to 2 years. Our current projections
make this story seem a bit far fetched so we have to make a decision of
whether to keep fighting along with the same product or to try something
entirely different.

You hear the brilliant stories of Instacart and Mattermark and Slack where a
later stage pivot turned out to be the greatest decisions of a lifetime but
you don't hear about the stories that don't work out. I was 100% willing to
spend a year working my ass off while learning a ton and meeting awesome
people, but now we are talking about 3-4 years going towards an uncertain
future.

~~~
Mz
Let me suggest you sit down with a piece of paper and write up four to six
scenarios. Either best and worst for both choices, or best, worst and "most
likely" for both scenarios. You may find that one choice has better outcomes
in all cases or that the worst case scenario for one is so bad that it makes
no sense to hope for the best case scenario, knowing you will live in dread of
it possibly going the other way.

The other thing you can try to do is arrange a "third option." Can you get a
break, even a short one, so you can get some rest and make this decision under
less psychological pressure?

My dad was diagnosed with a clot in his leg when I was 17 and was told they
wanted to amputate. He said "Can't we try something else first?" He was told
they could, but odds were poor it would work. He wanted to try it anyway. He
got to keep his leg.

If there is some way to say "no" to all the worst case scenarios -- to get
some breathing room and try to make a saner decision -- that is the way to go.

I hope that makes some sense. It may not be very well explained.

------
fuzzygroup
Hi. I'm a 49 year old software engineer who is still at the startup game -- I
started in it when I was 19. If you want to talk this thru with someone who
does have life experience and has been thru the startup grinder multiple,
multiple times, my email is on my profile. I'd be happy to get on the phone or
on skype with you and discuss. Just drop me an email. I've been there brother;
it will work out.

------
caseyf7
The startup game is all about confidence. If you've lost confidence, it's time
to move on. Get a good lawyer, ask for upfront bonus, two or more weeks break
before starting (ask for it to be paid or allow you to start with a negative
accrual), make sure health benefits are vested immediately so you can start
your procedure. The intensive rehabilitation may get your blood flowing and
your confidence back. Then you'll be able to make a clearer decision about
staying or calling a recruiter.

------
redm
"Is it time to call it quits?" \-- Yes, if you're tired now, it's only going
to get worse before it may eventually get better. If you have an opportunity
to make some money and move in another direction with your life, TAKE IT!

~~~
wheelerwj
I don't know how this guy is tired after 2 months of being funded, but if he
feels that way, i agree. take the deal.

------
hluska
Generally, I would tell you to take the offer. However, in this case, you used
a few words that worry me.

Are you suffering from burn out?

If you are, I have some bad news for you. An acquihire likely won't provide a
short term fix to your burn out. Instead, going from co-founder to employee
will be stressful. You will have a new set of organizational politics to deal
with, and you may find yourself plagued with constant "what ifs".

If you do take the acquihire, remember that your start date is an incredibly
important part of the negotiation. If you are burned out (and seriously my
friend, you sound burned out), take a bit of time off before you start.

------
Maro
Hey! First of all, congrats for making it this far!

I had a startup, but we never were able to secure funding before we folded. We
got approached by a company that was both interested in our product and also
wanted to invest. When this happened, we've already been doing the startup for
2.5 years, and I was already pretty tired, burnt out, often thinking about
opportunity costs, esp. when having beer with "normal" friends. I had a pretty
bad feeling about going into this negotiation for a number of reasons, mostly
because I was already pretty tired, and at this point we learned a lot about
the downsides of the business we were in (enterprise software sales).

But despite this feeling, we agreed with my cofounder that we'd go for it,
after all, this is what we had worked towards! It wasn't a bad decision---it
was a gamble, and we took it. But for me it would have been better if we
didn't take it. The negotiations went on for a year, it was very painful, I
became pretty depressed, couldn't sleep, one time for a straight week (!). In
the end the other party pulled out of the deal for totally unrelated external
reasons, outside of our control, and we folded the company. But also my then-
wife left me and I got divorced. I payed a big price for the gamble I took in
that last year.

I'm still happy that I did that startup (2009-2012), and I plan to do one
again, this time much wiser. But today I would not take that last gamble, I'd
call it quits there. If it doesn't work, if it doesn't feel right, then stop.

One good thought experiment is this: imagine you continue on. Then you
probably have to hire people at some point. Imagine hiring +3 people. Two have
families, kids: they will quit their current job to come to work for you, on
your project, at your company. Does it feel right? Imagine them showing up on
the first day, and you're their leader, you have to motivate them, etc. Does
it feel right?

------
dguaraglia
As someone who's been on the opposite side of this (having stayed in a zombie
startup while recovering from a bad health situation) I say _go for it_.
Health - both physical and mental - come before money. If you get to pay
investors, get a good gig out of it and a great entry (an exit is an exit!) on
your CV, you'll be doing much better than 95% of startups out there.

If you feel like you need someone to do a mental dump on and you are in the
Bay Area, please feel free to contact me. My email is on my profile.

------
DrNuke
You had a ride, enjoyed it and grew tired but did not crash, on the contrary,
all is ending level for all parties and you have lined up a new good job
thanks to this experience. It is much better an outcome than the great
majority of startups, so congrats, quit now and good luck with your new
endeavours. There may be another shot down the line, who knows?

------
touchofevil
I think you should take their offer based on: 1) You were already prepared to
pivot 2) You said this company is going to enter your market and would be hard
to compete against 3) They are offering you "great jobs" 4) Your
health/finances sound like they could use a chance to recover. Seems like a
good outcome for 18 months of hard work.

------
LarryPage
I did this exact scenario.

I'm way better off financially. However, I was _extremely_ depressed for a
year. I had my whole identity wrapped up in my business, and all of the sudden
I had a day job again. Like everything I was just disappeared overnight.

I'm mostly through the depression, but my motivation and personal life took
way more of a hit post-sale than they did during 90 hour work weeks and
stressing over payroll and constant marketing of myself.

I did not have investors though, so I did wind up with a nice bank account
after paying back some loans we took out. All in all, though, I still kind of
regret it.

~~~
Joe-Z
Well, considering Alphabet is one of the must successful companies on the
planet now I understand that, Larry Page. Don't be too hard on yourself though
:)

------
pfarnsworth
Take the offer. You're one of the 90% of startups that don't make it. There's
no shame in that whatsoever. You tried something that 99.99% of us will never
attempt and you were good enough to get bought by another company. That is an
outstanding achievement. Maybe you can take the resources of the acquiring
company and make that company better, all while working 40 hr weeks and health
benefits.

Also, you can give it another go in a few years. There's nothing stopping you
from doing that.

------
amasad
If you raised $1 mil+ why not pay yourself and get a good insurance? It's not
like you're bootstrapped, what are you doing with the money?

------
Grustaf
It's pretty clear you want to go through with it, so why the hesitation,
what's holding you bqck? And about the offer, unless you've exhausted your
negotiaton powers there's probably money on the table.

And I'd agree with others that 18 months isn't very much, 6 months without pay
is even less impressive. But that doesn't really matter, in the end it's up to
how you feel. Just don't expect too much sympathy. A better way to look at it
is this: what are the chances that your startup becomes a 10x:er? Investors
donttreally care if you keep it up for another year and increase the calue of
the company by 20%. Could it become massively successful or not?

------
jamesleonard
Being 25 I am automatically ruled out of giving life advice, but perhaps read
something like Shoe Dog and then make a decision. Regardless of what you do,
it isn't going to be easy. (team people)

------
thiagooffm
Just sell it, recover yourself and get back in the game when you feel it's
appropriate. Perhaps call me next time :-)

I've gave up the startup life a few years ago(without really counquering
anything beyond experience) meanwhile I've got married, moved to a better
country etc.

But I know all those things happened because my first tries with startups and
so on gave me the work ethics to conquer the shit I wanted, and this will be
kept my whole life, just as it does for you.

You can have your new shot when you are bored off your new job, and perhaps
even with more funds as before... to perhaps make something even greater.

Just sell it. Almost none of business people generate today are actually make
a profit or grow big, but there are many which makes competitiors or old
companies be on "fear state", making they buy the business and you cash out
well. That's a pretty good plan!

You don't need to end up with a billion dollar company to be happy. Even
making 500k in 2 years is a good amount of money. You can invest this in funds
and go salaried mode again.

You are doing well! But please don't neglect your health. It's the only thing
that really matters. Make sure now that your health is perfect, you get enough
exercise and you are satisfied with your life.

------
bfirsh
Yes!

I was in a similar situation a couple of years ago. We were much more
confident about our product and we had investors chasing us but we still took
the offer. It's been the best career decision of my life.

In the end it came down to this: the acquirer was going build the thing we
were building anyway, and it had a much larger chance of success if we just
went and built it for them.

It also gave me two really valuable things for my career:

1) A successful exit to brag about

2) Learning so much more about building startups than I would have in my own
company (the acquirer went from 25 to 250 employees while I was there)

Financially, a way to think about it is that a more established startup is
more likely to succeed than your startup, so if you guess some likelihoods of
each succeeding and multiply it by the value of your stake in each company,
you can see what your outcome of each decision might be. For us, this
calculation made it obvious we should join.

A tip, which bit me in the ass: try and negotiate getting some real stock as
payment. We took stock options to simplify the deal, which if you've read
enough of HN, you know why they're a PITA. Give all the cash to the investors
(if you're getting a good salary that doesn't matter anyway) then for your
payment try and get them to exchange share-for-share stock in your company
with stock in their company. In theory this isn't a taxable event (in UK law
at least, but i am not an accountant) so you don't have to deal with all of
the stock option bullshit. (Well, for some of your shares anyway. You'll
probably still get normal employee options too.)

Good luck! Email's in my profile if you want any more advice.

------
loceng
Are you building a platform or a feature? If you're building a feature and no
vision for a platform, then I would suggest to be acquired - however, you need
to compensate yourself for your time at market value, and your job should be
secured with them too if they are smart and value the experience you gained
developing what you have. If you really do have passion but are just burned
out, then perhaps figure out who are you missing on your team? Are you missing
a business logic person to help guide you and manage resources? Have you
created a pitch deck - not just to get more investment - but to get yourself
brainstorming and creating a solid plan for the future that you can get
excited about? Part of evolving a pitch deck is talking to people to see what
they get excited about with it - clients, potential clients, potential
investors, etc. I wish you the best.

------
deadmik3
consider the sunk-cost fallacy... you're focusing a lot on your 80+ hour work
weeks which is clouding the judgment in front of you: a successful business
exit into a comfortable job.

the alternative is competing against this company where you don't think you
can win. take the money.

------
rl3
> _...but the reality is that we have not had much confidence in the business
> for a while._

It's possible to be a true believer but still have doubts about logistical
matters, such as ability to execute or the product's sales potential.

If you and your founder are completely demoralized on all fronts, have been
for some time, and there's no way to rectify that (e.g. perhaps fixing your
burnout), then by all means throw in the towel.

If there's still a spark somewhere, then do what you think is best.

> _...and hundreds of thousands of dollars of opportunity cost income, I am
> tired._

I know the feeling, and it burns. Perhaps you can negotiate the acquisition
offer to make up for that?

------
SmellTheGlove
Sounds like a good opportunity has come along at the right time. You didn't
really give any reasons not to go for it.

> We have been working 80+ hours weeks without weekends and extremely low pay.
> My health has been declining (I was recently injured and need surgery but
> cannot without better insurance) and I had to move away from friends and
> family. I'm still young but my savings have essentially run out and I have
> become somewhat disillusioned by startup life.

This is a big reason to go for it. You have an exit on the table that also
provides a well paying job, good insurance, and a break from startup life.

------
x0ner
If you take the offer, do yourself a favor and bake some extras into your
employee contract or add them into the deal. Not sure of the terms, but if you
need to stick around, don't underestimate how long a year is when handcuffed.
Ask for a delayed start, X% bonus and a hefty salary. Even though you didn't
exit at some insane rate, you can't ignore you have a skillet or at the very
least, accomplished something most have not; that's worth more than your
average salary. Once you're locked in, it's a lot harder to adjust and it can
leave you frustrated.

------
aaronbrethorst
Your health is more important than your company. You will have many jobs and
opportunities to found companies, but only one body. Do what's right for you,
don't look backwards, and do it without any regrets.

------
bsvalley
You reached the point where you hate your project. It happens when you burnout
after spending countless hours working on your idea. You already have the
money to build a team, investors are backing you up. Take a 2 week vacation
Alone (empty your brain, get some fresh air, don't bring the internet with
you, go somewhere cheap and isolated up in the mountains).

Then when you come back, spend a week brainstorming with your co-founder on a
new idea (pivot). Prepare a few slides, setup a meeting with your investors
and ask for their support.

If they don't like it, sell.

------
mixmastamyk
It's your decision. Personally, think I'd take the offer and live to fight
another day with valuable lessons learned. Especially the one regarding a
sustainable workweek. Good luck.

------
throwaway1454
I have a software business.

On business, if our software cannot provide enough additional value to
customers, then the customers should use one of our competitors, and we'll
move on to another market. On personal, I've sacrificed all the above as well,
but I don't think of them. My customers are much more important to me.

If the 80+ hour weeks and extremely low pay are important decision points for
you, then you should choose the high paying job.

I wish you all the best.

------
matthewmacleod
It's time to call it quits, yes. There will be other chances, and unless you
have full confidence in the way forward then consider this a successful exit.

------
leesalminen
An acquihire can be a great way to build marketable skills outside of actually
writing the code. I'd try negotiating a mutually agreeable path that allows
you to move into management after some period of time.

From what I understand (no disrespect meant, just anecdotal accounts), it's
more difficult to remain hired as a coder after 40 (especially with kids).
Getting some management experience on your resume will help later in life.

------
aaronchall
Hold out to at least show your investors a bit of growth, even 20% more would
be a huge return annualized (if you've only held it a couple of months). I
would also want to pay myself my opportunity cost in lost wages.

If they're a big firm and they want into your established and competitive
industry, you're the cheapest and safest way in, so remember you have a lot of
bargaining power.

------
kowdermeister
I was there except the big followup investment and acquihire part. So if you
don't see a viable option to turn the company around and make it rock on the
short run, take the deal and enjoy the money. And get some rest.

------
mapster
hmmm.....frame it. 3 months from now and things are status quo with startup,
will you be mildly peeved you didn't accept the acqui-hire offer or
maddeningly furious/depressed?

------
leandot
Negotiate, get as much cash as possible on signing + a paid vacation of 3-4
weeks + do your operation. After your lockup period simply move on in a civil
manner.

------
foobarbazetc
"the reality is that we have not had much confidence in the business for a
while" \-- what more is there to say? Just do it.

------
silentmars
You're not in it to win it anymore. Get out while the getting is good, relax a
bit, prepare for your next shot.

------
logronoide
Health first. Always.

I screwed up my health fighting to keep my startup alive.

You can always try it again if you are healthy.

------
demarq
So is the lesson here to pay yourself? I wonder how other founders have gone
about this.

------
nitai
You have no faith in your own business. Sell it. Move on. Live is too short.

------
plinkplonk
Put health above _everything_ else.

Get that surgery done. Heal.

There is always time to make more money.

------
dgtlmoon
Get out while you can, your health and time on this planet matters.

------
Sujan
What is the opinion of your co-founder on this?

------
Sujan
What do your investors have to say about it?

------
ParameterOne
Don't give up. You CAN compete. You can do this, BELIEVE! I would ask them how
they determined their offer price though....good information to have.

~~~
throwaway1454
This is too emotional. Emotions are the first to go when you get punched in
the face.

~~~
ParameterOne
Too emotional? Emotions are thee only thing humans base decisions on, it's
either pain or pleasure, which ever is stronger in the mind. And this guy
didn't get punched in the face, I think you want him to fail.

------
jondubois
I worked 80 hours per week for 7 years straight.

At one point I was juggling full time university with a full time job and an
open source project on the side. My grades suffered, the startup I worked for
failed, my open source project failed. I did manage to graduate though.

Then I started another open source project, worked on it for 2 years, it also
failed because of tough competition.

So then I started yet another open source project and finally it did well and
people seem to like it (almost 4k stars on Github) - It's been 3 years.

I was working full time the entire time and I was exhausted all the time.

There is no point complaining about your situation because there is always
someone who has it worse than you.

You have to learn that nobody cares and nobody will try to help you - I think
this is the right way. I personally don't mind the struggle but I hate to see
people getting easy exits because someone wants to protect someone else's
feelings. Nobody deserves anything.

I wish more people would understand how it really works and you can only get
that from continuous failure over many years. It gives you a more accurate
feeling for what the odds really are.

~~~
Fr3dd1
I admire your working discipline and stuff but in which way do you think does
your answer help the thread owner?

~~~
jondubois
I just wanted to emphasize to not focus on rewards so much. Failure makes you
more resilient. This resilience can be a reward in itself.

~~~
ParameterOne
Just because someone doesn't understand your post and downvotes it is no
reason to have to explain. Some people have less than a cup half empty, they
have it turned upside down. +1 to you.

