Things you shouldn’t do when you’re selling your company:
- Don’t talk only with one party unless a no shopping agreement was signed
- Don’t keep the door open with an indefinite timeline (“Let us know whenever you’re ready.”) Full court press them with a clear timeline (“In 3 weeks we gotta move in another direction.”) They will most certainly need more time, especially if they’re a big company, but you can see how they react; if they’re not playing ball at all, they’re not really serious in the first place
- You as the founder shouldn’t shop around – companies are only acquired, not sold. Someone else should pitch for you (board member, investor, a corp dev at the acquiring company, etc); you can do hard pitching to that person so s/he can be convinced
- Don’t think about you first; think about them first. Why do they have to acquire you? Why can’t they afford to not buy you? Why will their future be jeopardized if they don’t buy you?
- Don’t be unsure about what you’re looking for. You need to have a clear Plan A (target buyer and acquisition amount). Not everything goes according to Plan A but you should still have a clear Plan A and move towards that
- Don’t have a false faith in the deal and put all (emotional) eggs into one basket. The vast majority of acquisition deals fall through. That’s the default state. Don’t be that guy in Victor Frankl’s book who had too much hope only to be despaired (literally) to death
- Don’t keep your cofounder in the dark – you might be hated later on
- Don’t bluff or put on a poker face – people see right through them, just as you can see other people right through them