Ask the attorney: Should I hire a pro negotiator now that I have a buyout offer? | Hacker News Reader

Ask the attorney: Should I hire a pro negotiator now that I have a buyout offer?

entrepreneur.venturebeat.com

18 pointstransburgh9 comments

I can only attest to the difference between small-time lawyers and big-time lawyers/trusted advocates of huge companies, who do business negotiations all the time: The difference is huge, and it absolutely makes sense to hire a pro negotiator. It ultimately comes down to price/terms. And an experienced negotiator can make a huge difference there.

For you, it's a once-in-a-lifetime situation. For them, it's daily business. Guess who's better at it.

EDIT: ah well, misread that as "Ask HN". My bad.

P.S.: I personally don't think it makes a lot of sense to have an investment banker as the lead negotiator. They sure do add value in some cases, but most of the issues arising in share purchase agreements are better entrusted to lawyers.

How does one get a buyout offer in the first place?

Why is this being downvoted? It's a good question that I'd like to hear good answers to.

In my case, we'd been approached.

If you don't mind sharing, what led to the approach? Did they read about you in the news or a blog, see an ad somewhere?

Guy Kawasaki wrote "The Art of the Start," but I think there's a need for an "Art of the Exit" as well.

We were getting a ton of press. We had reached out a bit to look for a search or technology partner (vivisimo and microsoft) and Yahoo reached out.

However, we already had an investment banker (Quincy Smith) who was able to talk to people on our behalf.

Approach potential buyer for something else like partnership or strategic investments, etc

I think there are two key components:

* Build something that someone will want to buy. Something awesome that solves a real problem elegantly, that's proven itself by garnering users, and that would fit well in an acquirer's business.

* Closely related to that: don't be a giant, money burning machine. Really cool ideas (i.e. unlimited free music) are often implemented with intractable business plans. Being far from profitable will make any buyer think twice about you.

Well, to be honest, I'm working with someone who's got both of those. It's a profitable business. The founder is just looking for a sale at this point. He's actually ready to build another startup, so he wants to sell his current one, now that's it's doing well.

I thought it was a stunning example of "incentive cause bias" (http://vinvesting.com/docs/munger/human_misjudgement.html) that the founder of a "boutique corporate law firm" would recommend that one should pay for the services of a "top M&A attorney" to decide what to do.

This isn't to say it's bad advice, but somehow it would have been more compelling coming from an entrepreneur who had been through this process rather than from the owner of a firm that benefits monetarily from offering this exact service.

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