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You gave no reason at all to reject the offer. And I cannot think of any too.

How an offer for something not even you believe it is worth something can be "low ball"??

Unless you have strong signaling that working at the acquiring company would be a nightmare (more than your current one), sell it now. And consider it fair!

My impression is that your only hesitation is because you are comparing your situation to an hipotetical one where you can cash out a huge payoff of "fuck you money". The situation you dreamed when you founded the startup. Well, forget it and deal with the facts in front of you. To me, the decision seems obvious (and I believe you have a great deal of self-awareness to notice it by yourself once you pass this denial phase of griefing for your business).

Good luck anyway!!

Exactly, obvious decision here. You don't have faith in your own business, take the offer.

You need time off. You need surgery and recovery time, and then you need some more time off post-recovery.

I say this as somebody who has recently returned to work after 2 months away due to surgery and needing rehabilitation post-surgery that was very intensive. I'm still feeling burned out, and I'm hoping to take a couple of weeks out in a month or two to just regroup and gather my energy back.

You need to figure out whether you can take some time out before making a decision, or if you need to make the decision now and then take the time off. If the acquiring company won't let you have enough time off (or more depending on the surgery), well, that's a problem, and you need to talk to your co-founder about whether you can do it whilst in the company.

The absolute top priority in all of this is your health: you can't pivot, sell or work for somebody else if you're not well. Deal with the burn out and surgery as an urgent priority, everything else is secondary.

Negotiate a small up front bonus, 2-4 weeks of paid vacation in the immediate future, at a minimum, and then take the deal.

Use the r&r to recharge, and the acquisition to bolster your track record. Start something new once you vest.

Thanks for the comment. That seems like a good deal to me. Do you have any tips for the negotiation?

Find someone whose job it is to negotiate on your behalf. For the same reason you wouldn't ask a lawyer to build a SaaS.

If there the acquisition price has a scheduled payout, don't put too much weight on any dollar amount that doesn't get paid out immediately as cash. You could get fired, or decide to quit, post-acquisition on day 2. Know what that means to walk away earlier than planned.

Also, having sold a company, I can't stress enough the value of having a good lawyer handle the legal bits. The last thing you wanna be dealing with when tire & grumpy is trying to find the loophole about how you could get screwed in a thick jumble of legalese.

Also, drink an emergency beer. You've earned it.

> If there the acquisition price has a scheduled payout, don't put too much weight on any dollar amount that doesn't get paid out immediately as cash.

You actually cannot take this too serious. Often an earn-out depends on achieving certain revenue/ebitda/milestone targets. However, after the acquisition, you will find that someone else is in control over the resources you get (e.g., employees, budget, etc.). In other words, they control the input that you can use to achieve the agreed-upon output.

Thus the acquirer is frequently in a situation where they can manipulate the outcome by simply decreasing the input and thus driving you out of your earnout.

There's people who say that you should not rely on the earnout at all and make a deal ONLY if you would make it based on the immediate payout.

Having been through this personally in the past two years, I cannot amplify this comment enough.

If you have earnout targets based on resources such as headcount, marketing spending, or anything else not under your control, you either have to negotiate that the payout is triggered if resources fall, or accept that you will likely be manipulated out of the money by future resource constraints.

I'm an M&A advisor and my wife has been a PE investor for 10+ years. If your expected payout is $1M+, we might be able to help negotiate (our fee is low digit %'s). My value proposition is simple -> I'll get you more money than you would be able to do on your own and I only succeed if you do. My contact info is in my profile if you're interested.

I hope that means no % taken if you don't get a certain pre-determined amount? They could likely easily get 10-20% more on their own, even if it's structured in some kind of bonus over time; a company's cash is King, so if they can spread out their expenses then that's more easy to swallow.

Edit to add: someone like you may be great and exactly what they need to get through this step of course, I hope they will have a clear enough mind to not make a rash decision.

It's in the company's interest that you're motivated, happy and well. I don't think you can realistically continue without the above. If they didn't want you on board, it'd just be an acquisition and not an acqui-hire. The 2-4 weeks vacation is not a big ask at all.

If you go in with those facts at your fingertips, you'll be in a pretty good starting point.

DON'T TAKE THE DEAL. The only reason some company would want to acquire you is because it must have accretion value. Why don't you see if you can turn them into your biggest customer?? Stick with it, don't quit, you are three feet from gold.

| I'm still young

This is one of the key phrases. You built something amazing that someone wants to have. If they set you up with a good job, you should take the offer.

As nhangen said, try to get a long vacation and take it. My recharge tip would be: Find a nice place to stay for at least 3 weeks. Maybe something with a beach and all necessary shops in walking distance (if you are in Europe, Paros is amazing). Stay for at least 3 weeks. The first week will be strange, it's really hard to come down from a lot of work. The second week will feel better, you start to relax. The third is bliss - you come down and kind of only wander between different states of relaxation (wake up, nice breakfast, beach, maybe a nap, afternoon tea, dinner, sleep). It really helps to get ready for the next step and gives you enough distance to re-evaluate what you want to do.

Graduating the incubator, paying back your investors and being acquired has good 'resume equity' - don't overlook the value of that. You can tote that out the next time you're looking for financing or shooting for a C-level gig. I'd take some time to recuperate, and figure out how you want to spend that extra 40 hours a week (suggest spending it on your health and with your loved ones).

Investors will always tell you that they want big multiples on their investment in order for their fund economics to work. They are right. They will also however concurrently never, ever be mad at someone for returning their money. (And in doing so, you'll be able to raise money again, much easier.)

The harsh criticism against acquihires is mostly reserved for companies who raise too much, too fast and/or lavishly waste money and opportunities available to them. That doesn't sound like you at all.

It sounds to me like this is _exactly_ what you wanted! You're tired, frustrated, don't believe in the product anymore, want to stop working on it, and a bigger company offers to acquire you. That's perfect!

Of course, the acquisition price will usually never be what you wanted, but you've made it further than most, and now get to wear the "I started a company and sold it" belt. Congrats :)

I say take the acquisition, use this as a learning experience, take some time to catch your breath, relax, pat yourself on the back, and try again when you're ready.

The terms of the deal allow us to mostly pay back our investors in full and would line us up with great jobs. It is not the exit we dreamed of but it gives us a nice story for the future and allows us to "wipe our hands clean".

Given the amount of stress you are dealing with, this sounds like a good thing to me. You get to undo the damage this has done to your finances, I assume it also would let you get the surgery you need and you can stop running yourself into the ground.

What are you hoping to get if you don't take this? What makes you hesitate to take it? Are the things that give you pause genuinely realistic scenarios or issues?

We have been amazingly blessed to get as far as we have so I think I'm hesitant because there is a chance that we can make this work despite my burn out and personal desire for stability. The reasons for accepting would be personal and although we would be able to return most of our investments, this is not what we set out to do.

My main fear is limping out of this a few years from now. With the money we have raised, we do have runway for a small team for a few years. But given the technical maturity of our product, we should really be in growth mode with the intention to raise a series A in 18 months to 2 years. Our current projections make this story seem a bit far fetched so we have to make a decision of whether to keep fighting along with the same product or to try something entirely different.

You hear the brilliant stories of Instacart and Mattermark and Slack where a later stage pivot turned out to be the greatest decisions of a lifetime but you don't hear about the stories that don't work out. I was 100% willing to spend a year working my ass off while learning a ton and meeting awesome people, but now we are talking about 3-4 years going towards an uncertain future.

Let me suggest you sit down with a piece of paper and write up four to six scenarios. Either best and worst for both choices, or best, worst and "most likely" for both scenarios. You may find that one choice has better outcomes in all cases or that the worst case scenario for one is so bad that it makes no sense to hope for the best case scenario, knowing you will live in dread of it possibly going the other way.

The other thing you can try to do is arrange a "third option." Can you get a break, even a short one, so you can get some rest and make this decision under less psychological pressure?

My dad was diagnosed with a clot in his leg when I was 17 and was told they wanted to amputate. He said "Can't we try something else first?" He was told they could, but odds were poor it would work. He wanted to try it anyway. He got to keep his leg.

If there is some way to say "no" to all the worst case scenarios -- to get some breathing room and try to make a saner decision -- that is the way to go.

I hope that makes some sense. It may not be very well explained.

You have been focussing on this thing for a long long time. In your own words you think it's a long shot.

Now imagine you're an 3rd party investor. You have $200k "return", health benefits, vacation, savings in one year on the one hand and a startup with your size stake with your current idea on the other. Which one would u pick?

As a selfish investor which would u pick?

I don't know the terms of your deal but you should be able to sit down and make an apples to apple comparison.

If you need someone who could work with you on sales part, please do write to me, my email is on profile. I have diverse sales experience of different industries and have lead sales team of more than 400 direct people, nationally.

I was also a founder for 52 months.

I would not ask for money for next 6 months. We can take it forward beyond that.

It is not money that I am after, it's the redemption and I hope you would understand.

If you can pay your investors back in full, surely you'll be taking a decent amount of money off the table as well? Or is their preference crazy relative to yours?

Hi. I'm a 49 year old software engineer who is still at the startup game -- I started in it when I was 19. If you want to talk this thru with someone who does have life experience and has been thru the startup grinder multiple, multiple times, my email is on my profile. I'd be happy to get on the phone or on skype with you and discuss. Just drop me an email. I've been there brother; it will work out.

The startup game is all about confidence. If you've lost confidence, it's time to move on. Get a good lawyer, ask for upfront bonus, two or more weeks break before starting (ask for it to be paid or allow you to start with a negative accrual), make sure health benefits are vested immediately so you can start your procedure. The intensive rehabilitation may get your blood flowing and your confidence back. Then you'll be able to make a clearer decision about staying or calling a recruiter.

"Is it time to call it quits?" -- Yes, if you're tired now, it's only going to get worse before it may eventually get better. If you have an opportunity to make some money and move in another direction with your life, TAKE IT!

I don't know how this guy is tired after 2 months of being funded, but if he feels that way, i agree. take the deal.

Generally, I would tell you to take the offer. However, in this case, you used a few words that worry me.

Are you suffering from burn out?

If you are, I have some bad news for you. An acquihire likely won't provide a short term fix to your burn out. Instead, going from co-founder to employee will be stressful. You will have a new set of organizational politics to deal with, and you may find yourself plagued with constant "what ifs".

If you do take the acquihire, remember that your start date is an incredibly important part of the negotiation. If you are burned out (and seriously my friend, you sound burned out), take a bit of time off before you start.

Hey! First of all, congrats for making it this far!

I had a startup, but we never were able to secure funding before we folded. We got approached by a company that was both interested in our product and also wanted to invest. When this happened, we've already been doing the startup for 2.5 years, and I was already pretty tired, burnt out, often thinking about opportunity costs, esp. when having beer with "normal" friends. I had a pretty bad feeling about going into this negotiation for a number of reasons, mostly because I was already pretty tired, and at this point we learned a lot about the downsides of the business we were in (enterprise software sales).

But despite this feeling, we agreed with my cofounder that we'd go for it, after all, this is what we had worked towards! It wasn't a bad decision---it was a gamble, and we took it. But for me it would have been better if we didn't take it. The negotiations went on for a year, it was very painful, I became pretty depressed, couldn't sleep, one time for a straight week (!). In the end the other party pulled out of the deal for totally unrelated external reasons, outside of our control, and we folded the company. But also my then-wife left me and I got divorced. I payed a big price for the gamble I took in that last year.

I'm still happy that I did that startup (2009-2012), and I plan to do one again, this time much wiser. But today I would not take that last gamble, I'd call it quits there. If it doesn't work, if it doesn't feel right, then stop.

One good thought experiment is this: imagine you continue on. Then you probably have to hire people at some point. Imagine hiring +3 people. Two have families, kids: they will quit their current job to come to work for you, on your project, at your company. Does it feel right? Imagine them showing up on the first day, and you're their leader, you have to motivate them, etc. Does it feel right?

As someone who's been on the opposite side of this (having stayed in a zombie startup while recovering from a bad health situation) I say go for it. Health - both physical and mental - come before money. If you get to pay investors, get a good gig out of it and a great entry (an exit is an exit!) on your CV, you'll be doing much better than 95% of startups out there.

If you feel like you need someone to do a mental dump on and you are in the Bay Area, please feel free to contact me. My email is on my profile.

You had a ride, enjoyed it and grew tired but did not crash, on the contrary, all is ending level for all parties and you have lined up a new good job thanks to this experience. It is much better an outcome than the great majority of startups, so congrats, quit now and good luck with your new endeavours. There may be another shot down the line, who knows?

I think you should take their offer based on: 1) You were already prepared to pivot 2) You said this company is going to enter your market and would be hard to compete against 3) They are offering you "great jobs" 4) Your health/finances sound like they could use a chance to recover. Seems like a good outcome for 18 months of hard work.

I did this exact scenario.

I'm way better off financially. However, I was extremely depressed for a year. I had my whole identity wrapped up in my business, and all of the sudden I had a day job again. Like everything I was just disappeared overnight.

I'm mostly through the depression, but my motivation and personal life took way more of a hit post-sale than they did during 90 hour work weeks and stressing over payroll and constant marketing of myself.

I did not have investors though, so I did wind up with a nice bank account after paying back some loans we took out. All in all, though, I still kind of regret it.

Well, considering Alphabet is one of the must successful companies on the planet now I understand that, Larry Page. Don't be too hard on yourself though :)

Take the offer. You're one of the 90% of startups that don't make it. There's no shame in that whatsoever. You tried something that 99.99% of us will never attempt and you were good enough to get bought by another company. That is an outstanding achievement. Maybe you can take the resources of the acquiring company and make that company better, all while working 40 hr weeks and health benefits.

Also, you can give it another go in a few years. There's nothing stopping you from doing that.

If you raised $1 mil+ why not pay yourself and get a good insurance? It's not like you're bootstrapped, what are you doing with the money?

It's pretty clear you want to go through with it, so why the hesitation, what's holding you bqck? And about the offer, unless you've exhausted your negotiaton powers there's probably money on the table.

And I'd agree with others that 18 months isn't very much, 6 months without pay is even less impressive. But that doesn't really matter, in the end it's up to how you feel. Just don't expect too much sympathy. A better way to look at it is this: what are the chances that your startup becomes a 10x:er? Investors donttreally care if you keep it up for another year and increase the calue of the company by 20%. Could it become massively successful or not?

Being 25 I am automatically ruled out of giving life advice, but perhaps read something like Shoe Dog and then make a decision. Regardless of what you do, it isn't going to be easy. (team people)

Just sell it, recover yourself and get back in the game when you feel it's appropriate. Perhaps call me next time :-)

I've gave up the startup life a few years ago(without really counquering anything beyond experience) meanwhile I've got married, moved to a better country etc.

But I know all those things happened because my first tries with startups and so on gave me the work ethics to conquer the shit I wanted, and this will be kept my whole life, just as it does for you.

You can have your new shot when you are bored off your new job, and perhaps even with more funds as before... to perhaps make something even greater.

Just sell it. Almost none of business people generate today are actually make a profit or grow big, but there are many which makes competitiors or old companies be on "fear state", making they buy the business and you cash out well. That's a pretty good plan!

You don't need to end up with a billion dollar company to be happy. Even making 500k in 2 years is a good amount of money. You can invest this in funds and go salaried mode again.

You are doing well! But please don't neglect your health. It's the only thing that really matters. Make sure now that your health is perfect, you get enough exercise and you are satisfied with your life.

Yes!

I was in a similar situation a couple of years ago. We were much more confident about our product and we had investors chasing us but we still took the offer. It's been the best career decision of my life.

In the end it came down to this: the acquirer was going build the thing we were building anyway, and it had a much larger chance of success if we just went and built it for them.

It also gave me two really valuable things for my career:

1) A successful exit to brag about

2) Learning so much more about building startups than I would have in my own company (the acquirer went from 25 to 250 employees while I was there)

Financially, a way to think about it is that a more established startup is more likely to succeed than your startup, so if you guess some likelihoods of each succeeding and multiply it by the value of your stake in each company, you can see what your outcome of each decision might be. For us, this calculation made it obvious we should join.

A tip, which bit me in the ass: try and negotiate getting some real stock as payment. We took stock options to simplify the deal, which if you've read enough of HN, you know why they're a PITA. Give all the cash to the investors (if you're getting a good salary that doesn't matter anyway) then for your payment try and get them to exchange share-for-share stock in your company with stock in their company. In theory this isn't a taxable event (in UK law at least, but i am not an accountant) so you don't have to deal with all of the stock option bullshit. (Well, for some of your shares anyway. You'll probably still get normal employee options too.)

Good luck! Email's in my profile if you want any more advice.

Are you building a platform or a feature? If you're building a feature and no vision for a platform, then I would suggest to be acquired - however, you need to compensate yourself for your time at market value, and your job should be secured with them too if they are smart and value the experience you gained developing what you have. If you really do have passion but are just burned out, then perhaps figure out who are you missing on your team? Are you missing a business logic person to help guide you and manage resources? Have you created a pitch deck - not just to get more investment - but to get yourself brainstorming and creating a solid plan for the future that you can get excited about? Part of evolving a pitch deck is talking to people to see what they get excited about with it - clients, potential clients, potential investors, etc. I wish you the best.

consider the sunk-cost fallacy... you're focusing a lot on your 80+ hour work weeks which is clouding the judgment in front of you: a successful business exit into a comfortable job.

the alternative is competing against this company where you don't think you can win. take the money.

>...but the reality is that we have not had much confidence in the business for a while.

It's possible to be a true believer but still have doubts about logistical matters, such as ability to execute or the product's sales potential.

If you and your founder are completely demoralized on all fronts, have been for some time, and there's no way to rectify that (e.g. perhaps fixing your burnout), then by all means throw in the towel.

If there's still a spark somewhere, then do what you think is best.

>...and hundreds of thousands of dollars of opportunity cost income, I am tired.

I know the feeling, and it burns. Perhaps you can negotiate the acquisition offer to make up for that?

Sounds like a good opportunity has come along at the right time. You didn't really give any reasons not to go for it.

> We have been working 80+ hours weeks without weekends and extremely low pay. My health has been declining (I was recently injured and need surgery but cannot without better insurance) and I had to move away from friends and family. I'm still young but my savings have essentially run out and I have become somewhat disillusioned by startup life.

This is a big reason to go for it. You have an exit on the table that also provides a well paying job, good insurance, and a break from startup life.

If you take the offer, do yourself a favor and bake some extras into your employee contract or add them into the deal. Not sure of the terms, but if you need to stick around, don't underestimate how long a year is when handcuffed. Ask for a delayed start, X% bonus and a hefty salary. Even though you didn't exit at some insane rate, you can't ignore you have a skillet or at the very least, accomplished something most have not; that's worth more than your average salary. Once you're locked in, it's a lot harder to adjust and it can leave you frustrated.

Your health is more important than your company. You will have many jobs and opportunities to found companies, but only one body. Do what's right for you, don't look backwards, and do it without any regrets.

You reached the point where you hate your project. It happens when you burnout after spending countless hours working on your idea. You already have the money to build a team, investors are backing you up. Take a 2 week vacation Alone (empty your brain, get some fresh air, don't bring the internet with you, go somewhere cheap and isolated up in the mountains).

Then when you come back, spend a week brainstorming with your co-founder on a new idea (pivot). Prepare a few slides, setup a meeting with your investors and ask for their support.

If they don't like it, sell.

It's your decision. Personally, think I'd take the offer and live to fight another day with valuable lessons learned. Especially the one regarding a sustainable workweek. Good luck.

I have a software business.

On business, if our software cannot provide enough additional value to customers, then the customers should use one of our competitors, and we'll move on to another market. On personal, I've sacrificed all the above as well, but I don't think of them. My customers are much more important to me.

If the 80+ hour weeks and extremely low pay are important decision points for you, then you should choose the high paying job.

I wish you all the best.

It's time to call it quits, yes. There will be other chances, and unless you have full confidence in the way forward then consider this a successful exit.

An acquihire can be a great way to build marketable skills outside of actually writing the code. I'd try negotiating a mutually agreeable path that allows you to move into management after some period of time.

From what I understand (no disrespect meant, just anecdotal accounts), it's more difficult to remain hired as a coder after 40 (especially with kids). Getting some management experience on your resume will help later in life.

Hold out to at least show your investors a bit of growth, even 20% more would be a huge return annualized (if you've only held it a couple of months). I would also want to pay myself my opportunity cost in lost wages.

If they're a big firm and they want into your established and competitive industry, you're the cheapest and safest way in, so remember you have a lot of bargaining power.

I was there except the big followup investment and acquihire part. So if you don't see a viable option to turn the company around and make it rock on the short run, take the deal and enjoy the money. And get some rest.

hmmm.....frame it. 3 months from now and things are status quo with startup, will you be mildly peeved you didn't accept the acqui-hire offer or maddeningly furious/depressed?

Negotiate, get as much cash as possible on signing + a paid vacation of 3-4 weeks + do your operation. After your lockup period simply move on in a civil manner.

"the reality is that we have not had much confidence in the business for a while" -- what more is there to say? Just do it.

You're not in it to win it anymore. Get out while the getting is good, relax a bit, prepare for your next shot.

Health first. Always.

I screwed up my health fighting to keep my startup alive.

You can always try it again if you are healthy.

So is the lesson here to pay yourself? I wonder how other founders have gone about this.

You have no faith in your own business. Sell it. Move on. Live is too short.

Put health above everything else.

Get that surgery done. Heal.

There is always time to make more money.

Get out while you can, your health and time on this planet matters.

What is the opinion of your co-founder on this?

What do your investors have to say about it?

Don't give up. You CAN compete. You can do this, BELIEVE! I would ask them how they determined their offer price though....good information to have.

This is too emotional. Emotions are the first to go when you get punched in the face.

Too emotional? Emotions are thee only thing humans base decisions on, it's either pain or pleasure, which ever is stronger in the mind. And this guy didn't get punched in the face, I think you want him to fail.

I worked 80 hours per week for 7 years straight.

At one point I was juggling full time university with a full time job and an open source project on the side. My grades suffered, the startup I worked for failed, my open source project failed. I did manage to graduate though.

Then I started another open source project, worked on it for 2 years, it also failed because of tough competition.

So then I started yet another open source project and finally it did well and people seem to like it (almost 4k stars on Github) - It's been 3 years.

I was working full time the entire time and I was exhausted all the time.

There is no point complaining about your situation because there is always someone who has it worse than you.

You have to learn that nobody cares and nobody will try to help you - I think this is the right way. I personally don't mind the struggle but I hate to see people getting easy exits because someone wants to protect someone else's feelings. Nobody deserves anything.

I wish more people would understand how it really works and you can only get that from continuous failure over many years. It gives you a more accurate feeling for what the odds really are.

I admire your working discipline and stuff but in which way do you think does your answer help the thread owner?

I just wanted to emphasize to not focus on rewards so much. Failure makes you more resilient. This resilience can be a reward in itself.

Just because someone doesn't understand your post and downvotes it is no reason to have to explain. Some people have less than a cup half empty, they have it turned upside down. +1 to you.

He is trying to tell him not to give up. That you can fail your way to success. Can't you see that?

So TLDR: I am a workaholic. It has not brought success. I hate it when other people succeed without sacrificing their lives to work?

Not what I meant. I don't like it when people succeed because their friend's dad is the CEO of the company which acqui-hired them (for example).

Ask HN: Tired founders facing acquihire – please advise