This document discusses mergers and acquisitions in the consumer internet space, specifically focusing on deals involving smaller startups with 1-30 employees. It outlines different types of deals, how companies find acquisition targets, factors for founders to consider when deciding whether to sell, deal mechanics and milestones in the acquisition process, how talent is evaluated, negotiating term sheets, diligence processes, and overall pointers for founders.
Outline text of a seminar I have given for 15 years locally as a volunteer for SBA\'s Service Corps of Retired Executives (SCORE).
Good overview of the process.
Entrepreneurship Development Training For GCOM (Oil & Gas Soft skills Ltd, La...Daniel Chinagozi
Training Slide for a Basic Entrepreneurship Training Delivered for Oil and Gas Softskills Limited, Lagos Nigeria, as Part of their Graduate Certificate in Oil and Gas Management (GCOM)Course. Covers a brief introduction to Entrepreneurship and business Venturing.
The basic factors to be considered while starting your business pgp vivaPROF. PUTTU GURU PRASAD
Line of business, layout, location, plant, and building, capital, a form of business organization, tax planning, tax management, investment, returns, expenses, GST
Looking to sell your business? This presentation maybe just what you're looking for!
I'm a stakeholder... get me out of here!
This is the full presentation, which took place on 01.03.11 and Eastwood Park Training & Conference Centre, Falfield, Wotton-Under-Edge (South Gloucestershire).
Speakers included:
- Chris Brill
- Will Abbott
- Peter Mardon
- Stewart Barnes
Outline text of a seminar I have given for 15 years locally as a volunteer for SBA\'s Service Corps of Retired Executives (SCORE).
Good overview of the process.
Entrepreneurship Development Training For GCOM (Oil & Gas Soft skills Ltd, La...Daniel Chinagozi
Training Slide for a Basic Entrepreneurship Training Delivered for Oil and Gas Softskills Limited, Lagos Nigeria, as Part of their Graduate Certificate in Oil and Gas Management (GCOM)Course. Covers a brief introduction to Entrepreneurship and business Venturing.
The basic factors to be considered while starting your business pgp vivaPROF. PUTTU GURU PRASAD
Line of business, layout, location, plant, and building, capital, a form of business organization, tax planning, tax management, investment, returns, expenses, GST
Looking to sell your business? This presentation maybe just what you're looking for!
I'm a stakeholder... get me out of here!
This is the full presentation, which took place on 01.03.11 and Eastwood Park Training & Conference Centre, Falfield, Wotton-Under-Edge (South Gloucestershire).
Speakers included:
- Chris Brill
- Will Abbott
- Peter Mardon
- Stewart Barnes
Proprietorship, Private Ltd. LLP or Partnership..?? Anjana Vivek
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I'm a stakeholder... get me out of here!
Venue: Stratton House Hotel, Cirencester
Date: 23rd November 2010
Presented by:
Stewart Barnes - Business LInk
Will Abbott - Randall & Payne
Peter Mardon - Witerbotham Smith Penley LLP
Chris Brill
Webinar: Building a Winning Bid: How to Respond to Requests for ProposalsMBO Partners
In this presentation you will learn how to:
- Write a targeted proposal cover letter
- Optimize the all-important executive summary
- Create a client-centered solution statement
- Respond to RFP/RFQ questions
- Format a professional proposal
- Navigate electronic forms and spreadsheet submission
Find more resources for independent professionals at www2.mbopartners.com/ic-resources
An engaging presentation for business owners that discusses the important topic of understanding the value of your business, and maximizing to realize the optimum return when it comes time to transfer the business to a third party.
Business Planning Made Easy | Retirement University Series | The Milner Group Chip Milner
If you have one conversation per month with a business owner and submit the valuation information. If your follow up skills and closing skills are just equal to the national average, you will create an additional $50,000 of revenue this year.
People are always asking for a list of fundamentals, a checklist they can use to start their own businesses. From your business type to your business model to your physical location, there are so many variables it's not easy to come up with a list that will work for everybody. The key, regardless of what type of business you're starting, is to be flexible!
This is a BDC presentation and not StartMeUp Ryerson.
The BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to help companies continue with operations and to promote their success.
This template is a set of questions designed to help you articulate the key elements of a business concept for a new venture or new product line.
Learn about the Business concept template here:
http://tools.tangiblefuture.com/business-concept.html
Now is the best time to start a company… Now what?Brian Kelly
It used to take years to launch a new software product. Now you can create, launch, and have paying customers getting value from your product in just a few months. This presentation explains why it's never been a better time to start a software company and what you need to consider to make it a reality.
Should you start with a side gig? Should you raise venture capital? How should you think about your cap table and employee options? What's your exit strategy? This presentation tackles these questions.
David Corcoran, cofounder at Third Rail Group, gave this talk at Do it Best Corp.'s annual Techapalooza on March 14, 2017.
Proprietorship, Private Ltd. LLP or Partnership..?? Anjana Vivek
Multiple options are there starting a venture, for example: Sole Proprietorship, Partnership, Limited Liability Partnership (LLP ), One Person Company (OPC), Private Limited etc. What is the right one for you? Here are some tips to help you decide on what may suit you.
I'm a stakeholder... get me out of here!
Venue: Stratton House Hotel, Cirencester
Date: 23rd November 2010
Presented by:
Stewart Barnes - Business LInk
Will Abbott - Randall & Payne
Peter Mardon - Witerbotham Smith Penley LLP
Chris Brill
Webinar: Building a Winning Bid: How to Respond to Requests for ProposalsMBO Partners
In this presentation you will learn how to:
- Write a targeted proposal cover letter
- Optimize the all-important executive summary
- Create a client-centered solution statement
- Respond to RFP/RFQ questions
- Format a professional proposal
- Navigate electronic forms and spreadsheet submission
Find more resources for independent professionals at www2.mbopartners.com/ic-resources
An engaging presentation for business owners that discusses the important topic of understanding the value of your business, and maximizing to realize the optimum return when it comes time to transfer the business to a third party.
Business Planning Made Easy | Retirement University Series | The Milner Group Chip Milner
If you have one conversation per month with a business owner and submit the valuation information. If your follow up skills and closing skills are just equal to the national average, you will create an additional $50,000 of revenue this year.
People are always asking for a list of fundamentals, a checklist they can use to start their own businesses. From your business type to your business model to your physical location, there are so many variables it's not easy to come up with a list that will work for everybody. The key, regardless of what type of business you're starting, is to be flexible!
This is a BDC presentation and not StartMeUp Ryerson.
The BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to help companies continue with operations and to promote their success.
This template is a set of questions designed to help you articulate the key elements of a business concept for a new venture or new product line.
Learn about the Business concept template here:
http://tools.tangiblefuture.com/business-concept.html
Now is the best time to start a company… Now what?Brian Kelly
It used to take years to launch a new software product. Now you can create, launch, and have paying customers getting value from your product in just a few months. This presentation explains why it's never been a better time to start a software company and what you need to consider to make it a reality.
Should you start with a side gig? Should you raise venture capital? How should you think about your cap table and employee options? What's your exit strategy? This presentation tackles these questions.
David Corcoran, cofounder at Third Rail Group, gave this talk at Do it Best Corp.'s annual Techapalooza on March 14, 2017.
You’ve set the goals, your agency says you’ve hit them — Great! But now what?
Discover how to break down the list of things your agency should be doing, how to set SMART goals, major red flags to watch out for, and many more from Joe Khoei of SalesX and Aaron Levy of Elite SEM.
SaaStock 2019 - Moving Up Market Bootcamp - Enterprise Sales for SaaS companiesLukas Hertig
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Engineering this full-scale pivot includes tackling many challenges; from understanding different service requirements, tackling new processes in departmental selling vs large scale deals, to identifying the right people needed to close such multi-million dollar deals.
This interactive workshop discusses the key challenges involved in cultivating the people and processes needed to smoothen this transition from mid-market to enterprise. Lukas Hertig, SVP Bizdev at Plesk, Investor and Advisor to startups, shares his business development playbook from the last 15 years, including real-life business cases to ensure your sales teams are equipped with the practical strategies needed to sell and succeed.
My slides from a workshop conducted for NASSCOM and IPMA in January 2015. The workshop was targeted towards basic and intermediate audience interested in learning about marketing for their technology products and services.
Getting funded sometimes seems like a career itself (and indeed it is a big part of the CEO’s responsibilities). In order to succeed, need to understand both the rules of the game and the equipment – without these you may squander some of your most valuable resources - time and relationships. Two keys communication tools are the Executive Summary and the PowerPoint Presentation (Pitch Deck). This forum will help you understand how these tools are used to generate a face-to-face meeting, make a persuasive and memorable presentation, and then follow through with the details needed for investors to begin their due diligence process.
PS business is complicated. Arriving at the right balance of delivering customer success along with commercial success is not easy. This presentation of mine attempts to highlight tried and tested strategies that have worked for me again and again.
I recently delivered a webinar to 800+ MIT students and affiliates about my perspective of a career in Strategy work.
Suggestions welcome. Please feel free to share.
Why You Should Let Your Buyer Design Your Sales ProcessCraig Rosenberg
“The buyer is in charge” is one of the most popular refrains in contemporary business sales and marketing today. Well it’s true; the Internet has changed buyer behavior forever. In the old days of business sales, the seller controlled the conversation. Now, the Internet has given the power back to the buyer. Marketing has undergone a radical transformation to change their approach to meet the new buyer’s expectations. It’s sales’ turn.
The reality is the buyer views their experience with a vendor as one of the most important factors in buying. When polled, buyers rate their experience with vendors higher than the expected answers of product and price. The sales leader’s imperative is to deliver the sales experience their buyers want and expect. In this webinar, we provide you with the blueprint and specific use case examples.
This discussion is tailored for CEOs, execs, VPs, upper-level management, and anyone involved in sales and overall business strategy.
Webinar - Why You Should Let Your Buyer Design Your Sales Process eCornell
“The buyer is in charge” is one of the most popular refrains in contemporary business sales and marketing today. Well it’s true; the Internet has changed buyer behavior forever. In the old days of business sales, the seller controlled the conversation. Now, the Internet has given the power back to the buyer. Marketing has undergone a radical transformation to change their approach to meet the new buyer’s expectations. It’s sales’ turn.
The reality is the buyer views their experience with a vendor as one of the most important factors in buying. When polled, buyers rate their experience with vendors higher than the expected answers of product and price. The sales leader’s imperative is to deliver the sales experience their buyers want and expect.
Craig Rosenberg is in the Chief Analyst for TOPO. TOPO helps organizations optimize their sales and marketing to order to deliver remarkable buying experiences. He has worked with 100’s of sales, inside sales, and marketing organizations to design, build and optimize their processes. He is known to many as the "Funnelholic", the name of his very popular sales and marketing blog.
In this webinar, we provide you with the blueprint and specific use case examples. You will learn:
- Best practices for understanding your buyer
- How the buyer affects your organizational design including people, process and technology
- Specific examples of companies creating buyer-responsive processes
- This discussion is tailored for CEOs, execs, VPs, upper-level management, and anyone involved in sales and overall business strategy.
GDG Cloud Southlake #33: Boule & Rebala: Effective AppSec in SDLC using Deplo...James Anderson
Effective Application Security in Software Delivery lifecycle using Deployment Firewall and DBOM
The modern software delivery process (or the CI/CD process) includes many tools, distributed teams, open-source code, and cloud platforms. Constant focus on speed to release software to market, along with the traditional slow and manual security checks has caused gaps in continuous security as an important piece in the software supply chain. Today organizations feel more susceptible to external and internal cyber threats due to the vast attack surface in their applications supply chain and the lack of end-to-end governance and risk management.
The software team must secure its software delivery process to avoid vulnerability and security breaches. This needs to be achieved with existing tool chains and without extensive rework of the delivery processes. This talk will present strategies and techniques for providing visibility into the true risk of the existing vulnerabilities, preventing the introduction of security issues in the software, resolving vulnerabilities in production environments quickly, and capturing the deployment bill of materials (DBOM).
Speakers:
Bob Boule
Robert Boule is a technology enthusiast with PASSION for technology and making things work along with a knack for helping others understand how things work. He comes with around 20 years of solution engineering experience in application security, software continuous delivery, and SaaS platforms. He is known for his dynamic presentations in CI/CD and application security integrated in software delivery lifecycle.
Gopinath Rebala
Gopinath Rebala is the CTO of OpsMx, where he has overall responsibility for the machine learning and data processing architectures for Secure Software Delivery. Gopi also has a strong connection with our customers, leading design and architecture for strategic implementations. Gopi is a frequent speaker and well-known leader in continuous delivery and integrating security into software delivery.
The Art of the Pitch: WordPress Relationships and SalesLaura Byrne
Clients don’t know what they don’t know. What web solutions are right for them? How does WordPress come into the picture? How do you make sure you understand scope and timeline? What do you do if sometime changes?
All these questions and more will be explored as we talk about matching clients’ needs with what your agency offers without pulling teeth or pulling your hair out. Practical tips, and strategies for successful relationship building that leads to closing the deal.
SAP Sapphire 2024 - ASUG301 building better apps with SAP Fiori.pdfPeter Spielvogel
Building better applications for business users with SAP Fiori.
• What is SAP Fiori and why it matters to you
• How a better user experience drives measurable business benefits
• How to get started with SAP Fiori today
• How SAP Fiori elements accelerates application development
• How SAP Build Code includes SAP Fiori tools and other generative artificial intelligence capabilities
• How SAP Fiori paves the way for using AI in SAP apps
Welocme to ViralQR, your best QR code generator.ViralQR
Welcome to ViralQR, your best QR code generator available on the market!
At ViralQR, we design static and dynamic QR codes. Our mission is to make business operations easier and customer engagement more powerful through the use of QR technology. Be it a small-scale business or a huge enterprise, our easy-to-use platform provides multiple choices that can be tailored according to your company's branding and marketing strategies.
Our Vision
We are here to make the process of creating QR codes easy and smooth, thus enhancing customer interaction and making business more fluid. We very strongly believe in the ability of QR codes to change the world for businesses in their interaction with customers and are set on making that technology accessible and usable far and wide.
Our Achievements
Ever since its inception, we have successfully served many clients by offering QR codes in their marketing, service delivery, and collection of feedback across various industries. Our platform has been recognized for its ease of use and amazing features, which helped a business to make QR codes.
Our Services
At ViralQR, here is a comprehensive suite of services that caters to your very needs:
Static QR Codes: Create free static QR codes. These QR codes are able to store significant information such as URLs, vCards, plain text, emails and SMS, Wi-Fi credentials, and Bitcoin addresses.
Dynamic QR codes: These also have all the advanced features but are subscription-based. They can directly link to PDF files, images, micro-landing pages, social accounts, review forms, business pages, and applications. In addition, they can be branded with CTAs, frames, patterns, colors, and logos to enhance your branding.
Pricing and Packages
Additionally, there is a 14-day free offer to ViralQR, which is an exceptional opportunity for new users to take a feel of this platform. One can easily subscribe from there and experience the full dynamic of using QR codes. The subscription plans are not only meant for business; they are priced very flexibly so that literally every business could afford to benefit from our service.
Why choose us?
ViralQR will provide services for marketing, advertising, catering, retail, and the like. The QR codes can be posted on fliers, packaging, merchandise, and banners, as well as to substitute for cash and cards in a restaurant or coffee shop. With QR codes integrated into your business, improve customer engagement and streamline operations.
Comprehensive Analytics
Subscribers of ViralQR receive detailed analytics and tracking tools in light of having a view of the core values of QR code performance. Our analytics dashboard shows aggregate views and unique views, as well as detailed information about each impression, including time, device, browser, and estimated location by city and country.
So, thank you for choosing ViralQR; we have an offer of nothing but the best in terms of QR code services to meet business diversity!
UiPath Test Automation using UiPath Test Suite series, part 4DianaGray10
Welcome to UiPath Test Automation using UiPath Test Suite series part 4. In this session, we will cover Test Manager overview along with SAP heatmap.
The UiPath Test Manager overview with SAP heatmap webinar offers a concise yet comprehensive exploration of the role of a Test Manager within SAP environments, coupled with the utilization of heatmaps for effective testing strategies.
Participants will gain insights into the responsibilities, challenges, and best practices associated with test management in SAP projects. Additionally, the webinar delves into the significance of heatmaps as a visual aid for identifying testing priorities, areas of risk, and resource allocation within SAP landscapes. Through this session, attendees can expect to enhance their understanding of test management principles while learning practical approaches to optimize testing processes in SAP environments using heatmap visualization techniques
What will you get from this session?
1. Insights into SAP testing best practices
2. Heatmap utilization for testing
3. Optimization of testing processes
4. Demo
Topics covered:
Execution from the test manager
Orchestrator execution result
Defect reporting
SAP heatmap example with demo
Speaker:
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
Generative AI Deep Dive: Advancing from Proof of Concept to ProductionAggregage
Join Maher Hanafi, VP of Engineering at Betterworks, in this new session where he'll share a practical framework to transform Gen AI prototypes into impactful products! He'll delve into the complexities of data collection and management, model selection and optimization, and ensuring security, scalability, and responsible use.
Elevating Tactical DDD Patterns Through Object CalisthenicsDorra BARTAGUIZ
After immersing yourself in the blue book and its red counterpart, attending DDD-focused conferences, and applying tactical patterns, you're left with a crucial question: How do I ensure my design is effective? Tactical patterns within Domain-Driven Design (DDD) serve as guiding principles for creating clear and manageable domain models. However, achieving success with these patterns requires additional guidance. Interestingly, we've observed that a set of constraints initially designed for training purposes remarkably aligns with effective pattern implementation, offering a more ‘mechanical’ approach. Let's explore together how Object Calisthenics can elevate the design of your tactical DDD patterns, offering concrete help for those venturing into DDD for the first time!
LF Energy Webinar: Electrical Grid Modelling and Simulation Through PowSyBl -...DanBrown980551
Do you want to learn how to model and simulate an electrical network from scratch in under an hour?
Then welcome to this PowSyBl workshop, hosted by Rte, the French Transmission System Operator (TSO)!
During the webinar, you will discover the PowSyBl ecosystem as well as handle and study an electrical network through an interactive Python notebook.
PowSyBl is an open source project hosted by LF Energy, which offers a comprehensive set of features for electrical grid modelling and simulation. Among other advanced features, PowSyBl provides:
- A fully editable and extendable library for grid component modelling;
- Visualization tools to display your network;
- Grid simulation tools, such as power flows, security analyses (with or without remedial actions) and sensitivity analyses;
The framework is mostly written in Java, with a Python binding so that Python developers can access PowSyBl functionalities as well.
What you will learn during the webinar:
- For beginners: discover PowSyBl's functionalities through a quick general presentation and the notebook, without needing any expert coding skills;
- For advanced developers: master the skills to efficiently apply PowSyBl functionalities to your real-world scenarios.
Dev Dives: Train smarter, not harder – active learning and UiPath LLMs for do...UiPathCommunity
💥 Speed, accuracy, and scaling – discover the superpowers of GenAI in action with UiPath Document Understanding and Communications Mining™:
See how to accelerate model training and optimize model performance with active learning
Learn about the latest enhancements to out-of-the-box document processing – with little to no training required
Get an exclusive demo of the new family of UiPath LLMs – GenAI models specialized for processing different types of documents and messages
This is a hands-on session specifically designed for automation developers and AI enthusiasts seeking to enhance their knowledge in leveraging the latest intelligent document processing capabilities offered by UiPath.
Speakers:
👨🏫 Andras Palfi, Senior Product Manager, UiPath
👩🏫 Lenka Dulovicova, Product Program Manager, UiPath
Accelerate your Kubernetes clusters with Varnish CachingThijs Feryn
A presentation about the usage and availability of Varnish on Kubernetes. This talk explores the capabilities of Varnish caching and shows how to use the Varnish Helm chart to deploy it to Kubernetes.
This presentation was delivered at K8SUG Singapore. See https://feryn.eu/presentations/accelerate-your-kubernetes-clusters-with-varnish-caching-k8sug-singapore-28-2024 for more details.
Leading Change strategies and insights for effective change management pdf 1.pdf
Web 2.0 Mergers & Acquistions
1. Mergers & Acquisitions in Consumer Internet
Jul 2012
contact
Ashish Kelkar
akelkar@alum.mit.edu
http://www.linkedin.com/in/ashishkelkar
This talk is based on my experience in the Corporate Development and Finance at Google
from 2004 to 2010, nothing in this presentation or talk should be construed as based on or
views of my current employer [Facebook Inc]. I work at FB in the Operations & Analytics role
and am not involved in any M&A activities.
2. Before we start some things to remember:
1.Every deal is different and yet similar.
2.This talk and learnings are based on my experiences in the
finance and corporate development team at Google (2004 -
2010).
3.CEO's, Founders, CTO's and employees are all humans and
have very different agendas and expectations. It can be
especially emotional for first time founders.
4.No good founder ever starts his company with the intention
of selling.
5.There is usually no magic formula, but you can do things to
get a favorable outcome.
Lets get rolling......
3. Types of deals
- Mega deals ($$$, people, usually public, SEC fillings)
- Large size deals ($$ like AdMob, ITA software etc)
- Mid size deals $50-$200+M (Slide, Playdom, Playfish etc)
Deals in Web2.0 space for this audience
- These also happen to be the sweet spot for mid to large companies
- Anywhere between 1 to 30 people (sometimes larger)
- Usually $0.5 - $3M per tech employee (developers and product mgrs)
- These deals can be broadly classified as:
o Talent and Product acquisitions – 70 - 80%**
o Product and Traffic acquisitions – 18 - 28%
o IP and code base – 1.99%
o Sales and channels – 0.001%
Let there be no mistake its mostly about people, people and some product
**numbers are illustrative only
4. Finding targets?
1. Most acquisitions are a result of inbound engineering and product
leads from development teams
• teams feel ownership and it's a successful integration
• result of personal relationships that continue
2. Product roadmaps and inputs from development teams
3. Teams are always scouting, meeting founders in social and
business settings.
4. General blogs, social media and especially specific product related
blogs, publications.
5. VC's and bankers showcasings - usually not productive
Focus on 2 and 1 in that order.
• Look for specific holes in companies product offerings, do not
assume they must be working on it because you can move much
faster (Picnik, DocVerse, C-search)
• Hire good talent, usually good people know other good people at
larger companies.(Etherpad)
5. Do you want to sell?
Typical target company
- Launched, some traction, but not a spectacular success.
- Freemium model, thousand plus users, tens to hundred paying
customers.
- Few angel investments (convertible debt), looking to raise first
round of serious funding to start expansion.
- Usually M&A teams are competing with Series A term sheets
Considerations
- Your expectations and reality check (market, traction, product)
- Your personal financial situation
- Your employees and their future
-Potential dilution versus selling today
-Be aware the entire process is a huge distraction – you should
assume at minimum 2 weeks of lost productivity
6. Deal mechanics – quick look at mechanics
(since I will be referencing a lot of these milestones)
- Scouting and very preliminary talks, discussions with technical teams
- Internal discussions with engineering and product teams - Thumbs up
- Initial discussions with business and start-up
• price expectations
• type and reason for deal - talent or non talent deal
• people / hiring expectations (especially non-technical staff)
• process and talent evaluation / interviews
- Interviewing and talent evaluation (more on this later)
- MOU or LOI
- Term sheet
- Diligence
- Signing
- Closing and any PR announcements
7. Talent / IP acquisitions - you have decided to sell
Companies ideally want to evaluate the talent as early as
possible and you want to delay this as much as possible -
Why?
- MOU / LOI / Term sheets are non-binding (except no-shop clauses)
- The only reason I have seen companies walk away from deals is
because the interviews did not go well.
- Company morale
- Confidentiality
Bad news - you do not have much of a choice
- Start with senior technical folks, founders, CTO, Chief Architect
before term sheet then the others.
- You could keep the team in dark saying we are evaluating a
commercial partnership that could turn into an acquisition.
- Set expectations with team about the deal falling thru for any number
of reasons.
8. Talent / IP acquisitions - you have decided to sell
How can you help?
- Be as open as you can about the teams strengths and weakness
- Share resumes, skills and your perceptions
- Become part of the interview process, get and provide information on
who may be the best interviewers
The M&A team want's to help?
- Sensitize our interviewers
- Let them know that the stress level may be high (people are
interviewing to keep jobs)
- We like to get deals done, not rewarded for deals falling thru!!!
What does the buyer want out of this exercise?
1. Make sure they are buying the real deal
2. Identify key employees
3. Enables distribution of stay bonuses (backend of purchase price)
9. Term Sheets (everything is negotiable!!!)
Basically 3-5 page document that lays out the key terms (punch list)
• Price and breakdown (Frontend versus Backend)
example $5M purchase price - $2M upfront and $3M in retention
paid over 2-4 years or milestones. (detailed example next)
• Any clawbacks.
• Type of deal - stock versus asset purchase - this has tax
implications, stock deals usually result in smaller capital gains
versus asset sales.
• No shop clause - only binding term - negotiate for as small a term
as possible (~30 days)
• Escrow (10% for 1 year to 20% for 3 years) - negotiate for as small
an amount and term as possible
• IP indemnities - research the company's acquisition history and be
realistic about your product IP, this may or may not not be a point
you want to care about.
• Milestones – Generally avoid product based milestones unless
they are very specific and available resources are quantified,
prefer simple calendar year retentions
10. Example of purchase price split:
• Four person company (3 founders, 1 employee)
Founders (40%, 40%, 5%)
Employee (0.30%), Employee option pool (14.7%)
• Two angel investors (convertible debt)
Investor A put in 30K @ a cap of 4M i.e. for any deal
or acquistion valuation >4M this investor gets 0.75%
equity
Investor B put in 50K @ a cap of 3M i.e. for any deal
or acquistion valuation >3M this investor gets 1.667%
equity
• $10M purchase price ($4M upfront and $6M backend
retention)
• Investor's get paid:
• Investor A 0.75% = 75K, Investor B 1.67% = 167K from the front end $4M,
we are left with $3.758M + $6M (backend)
11. Pro-rata of remaining equity
Founder 3 and Employee 1 are superstars that we want to
absolutely retain : we negotiate with the key founders and this is
what the final resolution may look like.
The above retention is in addition to a regular employee package
**above example is illustrative only
12. Diligence and final agreement
The buyer will go thru all your formation docs, financing docs,
commercial documents, code, any IP, patent filings, employment
arrangements, leases, privacy policy. Problem areas and how to avoid
issues.
• Hiring and firing (job, no-job and fixed terms, stay bonuses)
o you will be making a lot of judgement calls regarding employees salaries,
titles, stay bonuses, be fair and open with your team and the acquirer.
• Commercial agreements that you have in place - issues that cause
problems
o exclusivity
o termination rights
o audit rights
o and change of control clauses.
You may not have much choice when you sign these as a start-up but be cognizant
of the fact that these may bite you during an acquisition
• Open Source - GPL, LGPL licensing, documentation
13. Diligence and final agreement (contd.)
• Employment agreements and non-compete.
o If the terms seem very onerous, have an employment lawyer take a look at this
and get their advise, generally ask for specifics and avoid broad language
around type of industry that you cant work in.
• Privacy policy and PII gathering
• Dealing with paying customers.
• Transition services.
o All of these depend on the future product plans.
o In most talent acquisitions the products in its existing form is killed so you need
to have a 30-90 day transition in place for customers.
o Usually refund the pre-paid customers or some other monetary benefit for
goodwill.
• PR and messaging.
o insist on some kind of PR (blog post etc.)
o if acquirer is reluctant to do a big PR push (usually they are for acqa-hires) you
can still get the word out thru email to customers or a blog on your website.
o If you have paying customers, use this as leverage, you have to let them i.e. the
world know that you have been acquired.
Again everything is negotiable, depends on the situation.
14. Overall pointers
• It is a good idea to have the services of a good corporate lawyer in
these transactions.
• You should always make the business decisions and calls, have
the lawyer for advice and to understand the jargon.
• Before you sign the term sheet is probably where you have
the most leverage.
• The technical / product team championing you is probably your
best friend in sticky situations - they can push from within.
• Almost all transactions come to a point where both sides are
willing and want to walk away, but the transaction does
happen.
• It is an emotional roller-coaster especially for first time founders.
15. Takeaways
• Never start or optimize your start-up with an acquisition in mind (it
should be an afterthought, fallback).
• Hire great people, be generous with equity to real talent - talent
attracts talent and their network is your way into larger companies.
• Build awesome features that compliment / supplement product
gaps in companies offerings and they will find you.
• You can screw your employees big time if you are not careful and
its never a good idea.
16. Appendix (Convertible debt)
• Investor A gives 30K with a $4M cap -what does this mean
• Basically start-up is too early to put a valuation at this time, so
when the first serious financing occurs if
o pre money valuation is < 4M then investor A gets a pro rata
equity share say $1M valuation then 30K / 1M = 3%, at $2M its
1.5% and so on upto $4M
o pre money greater than or equal to $4M, investor A gets 30K /
4M = 0.75% of equity.
17. I would like to demystify mergers and acquisitions, specifically in the web/consumer internet space.
Proposed Agenda
1. What are companies in the consumer internet space looking for?
2. How do they find targets?
3. What could you do to become a target if you so desire?
4. Talent and product acquisitions versus others acquisitions.
5. To sell or not to sell?
6. What to watch out for?
7. Negotiations, Term Sheets - what should you care and what should you not care about?
8. Talent interviewing by acquirer, purchase price splits and emotional issues around employment
9. Avoiding diligence trip-ups - commercial contracts, open source, employment non-competes,
PR.
I was formerly with the Google Corporate finance and Corporate Development team (7 years) and
did over 15 acquisitions. Would propose an hour with Q&A as we go along to make it interactive.