Nobody will tell a real acquisition story in public 🤑

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One of my more successful angel investments was acquired by a big tech company. The founder wrote a very detailed story of the acquisition–which I reviewed and thought was pretty great. Useful for other founders to see the windy and scary road he navigated to close the deal. And some of the tactics that proved necessary to actually get the deal done.

He never published his account.

That was my advice, and the advice of many other of his closest advisors and investors. Even the most giving founders wanting to pay it forward will, like him, act rationally and bottle up the story. And it’s just for one of two reasons. Both center around incentives.

I’m done

Some exits are life changing. Less than you’d think, but definitely more than none. Founders become “post economic”: that is, have so much money regular economics don’t apply to them. There’s just no reason for them to write anything in public. And lots of legal reasons why not to.

That’s all. They’re done. Why write? Only bad things will happen.

I’m not done

Some exits (more than you’d think) result in people having some money but still being in the game. I’ve had a few of these, for which I’m fortunate and thankful. I try not to wish there was one more zero on an acquisition price, or that I took that VP job at Lyft at the beginning. But I digress…

When you’re still in the game, you don’t want to offend anyone. They might be an investor or a champion the next time. You especially don’t want to upset your current employer, who probably has a lot of your money tied up in an earn out or re-vesting schedule, and an ironclad NDA you signed on file.

As time passes, the need to tell your story lessens. You get more distance. Perhaps you actually hit that earn out, and edge towards a post-economic lifestyle. Perhaps you’re like Ev Williams, and the basically failed company you sold to Google for stock turns into a (probably) life changing amount of money after Google went public a year later. (Of course, that’s speculation because Ev has never written much public about it. Funny, that.) Perhaps you just have other demands on your time, other things to focus on.

After a few years pass, the story seems less important. The scars it left you with fade. You realize the stress, agony and sleepless nights you experienced was actually the universe helping you grow. Whether worth it or not, it just is what it is. You don’t need the attention. Maybe you’re even luckier (or wiser) and, unlike some exited founders, you realized that most people don’t actually care that you made $5 or $50 or $500 million a few years ago. And the few people that do care probably mean you harm.

So where do you go for the real stuff?

The stories still matter. I think the gap in the public record is a disservice to founders, because in the absence of truth, all that’s left to base decisions on is fluffy and inaccurate TechCrunch articles, contrived press releases and heavily coached press interviews. Nothing that is real.

There are three places you can go to get the real story. They’re actually kind of obvious, but each has non-obvious drawbacks. First, there are lawyers. Then, the bankers. They both know a lot. And then there are exited founders who might tell you one-on-one. There are three very different perspectives, and all bring their own value–and blind spots.

Lawyers have the most up to date information. The good ones work on multiple deals at once, and the partners have a pulse on what the market is doing. They can’t tell you anything about any specific deal (attorney client privilige is never taken lightly by lawyers; they have too much to lose). But, they know the market at a very deep in the weeds level. Usually lawyers are very law-abiding and risk-avoiding (surprise!). So they’re not always the best at being truly strategic when it comes to deal terms. That’s what bankers are for.

Bankers have faced down buyers trying to walk, or sellers changing their minds, or countless other unpleasant situations. They are the ones that don’t get paid anything unless the deal closes (usually) so they have all the incentive or stress to get deals closed. In almost all cases, their incentives are aligned with yours–provided you want to get a deal done, because closing deals and getting paid is what motivates them. (Sometimes you might wonder if it’s just getting paid, actually and closing deals is just a happy by-product.) But most bankers are just agents; they’ve never sold their own company. Being a principal is different.

The exited founders have the advantage of having sat in the chair. They’ve felt the feelings. The bankers and lawyers are the chickens at this breakfast; the founders are the pigs. They are fully committed. Lawyers might work on 8 deals at once. Bankers might work on 8 in a good year. Founders work on one ever 5-10 years, best case scenario.

The only downside to founders is their dataset is limited and out of date. And almost too personal. Their deal was done in a different market than yours–even if it was done a quarter or two ago (never more true than when I am writing this!). The market may have changed, the tactics may be different. But the feelings are likely mostly the same. How they managed their bankers are lawyers may be truly relevant. Exited founders are an incredible resource.

Filling the gaps

If you’re a founder at the point of considering a sale, you have investors in your cap table, advisors, or others who are exited founders and can offer you some wisdom. Take it.

But also talk to some quality bankers and lawyers. The founder perspective is useful, perhaps even the most useful, but it’s not going to give you the full picture. You’re the pig in this breakfast–act like it.

If you’re thinking about selling right now I’ve got some scars. And some lessons learned. Feel free to hit me up.

PS: Don’t forget to get on this waitlist. It’ll be awesome–maybe you’ll tell your grandkids about it one day. Shout out to bolt.new–the tool I used to build this. Any bugs are it’s fault, just reply to this email and tell me about them 🙂