Pricey SaaStr: How Do You Know if a Potential Acquirer is Actually , Or Simply Kicking the Tires?
Effectively, first off — you may’t. Not with out partaking.
And at some stage, there isn’t any actual distinction between early stage due diligence and tire kicking.
Acquisitions don’t occur out of the blue. They virtually at all times take time. In my first start-up as a co-founder, it was a multi-year course of. At my second, it was arguably a 5-year course of. Of competing, attending to know and respect one another, seeing the market change and develop, buyer adoption, and so on.
The potential acquirer that simply desires to kick the tires at the moment might nicely become an actual acquirer X months or years down the street.
Let me offer you an much more particular instance. About 12 months earlier than we had been acquired by Adobe, we had a deep dive assembly and I shared virtually all our metrics. After all I saved some secrets and techniques however I shared how our enterprise mannequin actually labored, together with the nonobvious components.
Two days later — two days — I learn on TechCrunch they’d launched a aggressive product. No heads up. No point out of it on the assembly. Simply learn it proper there on the ol’ TechCrunch over my morning espresso.
That appeared not that cool to me. However the actuality is, in internet companies — nothing is THAT confidential. As soon as your product is on the market, you have got clients, and so on. … with somewhat work, I can work out most of what I have to find out about you. And any product in the end could be copied.
And in that story, the aggressive product failed, and 12 months later, we had been purchased for an enormous sum.
So my learnings and classes are: simply share. Not the actually secret stuff. However every part else. It simply saves time. And even when they’re your competitor now, or going to be … you don’t know the way issues will change down the street.
Additionally bear in thoughts quite a lot of acquisitions take time. Offers typically appear to :”die” or not occur, when it truth, it’s the start of a course of. They typically get revived 3, 6, 12, 18 months later. Whenever you get an e-mail out of the blue from the CEO …
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