We almost sold Gridspy | Hacker News Reader

We almost sold Gridspy

blog.gridspy.co.nz

6 pointsgridspy3 comments

We just went through something similar this past summer, where a large company approached us about purchasing our technology and team. At first, we were extremely excited and we worked our butts off to get a couple of new features that were in the works out the door and had a second meeting with them to demo the new features and then spoke to their head guy about terms and numbers.

They kept delaying and hemming and hawing and the intent to acquire cooled off a bit leaving us a little disheartened and wondering what happened.

Like you guys, we had to go and continue working on our product but at the same time, allocate time to replenish our coffers as you said but we're still trying to figure out what happened.

I'm curious to hear more about what you learned from the offer, aside from the emotional repercussions of putting a price on your baby. Going forward, do you intend to set a minimum threshold above which you'll sell the company? (You say you have a real sense of the company's value - is it the price you named or something else?) Have you been able to identify characteristics of the offer that will be red flags in the future, e.g. symptoms of a quick pull out? You seem to have answered these for yourself, but I'd be curious to hear more about the process and outcome.

Awesome questions!

Will we set a minimum price threshold?

Probably the major reason why we are considering selling the company at this point is because we are great at creating products but pretty poor at selling them. Stephen and I are both concerned that we'll fail to sell our product ourselves.

This is THE major issue that we will have to face over the coming few months. Once we have a repeatable sales model, I doubt we will want to sell the business unless the offer is very attractive for us.

There is definitely a price point at which we would just go "sure, its yours!" and a lesser point where we have to get the terms we want. Stephen and I love making things, so we're more likely to go where the interesting challenges are.

Did that answer your question?

How did you get a sense of your value?

Once we realized how central our device was to our potential investor's plans, it started to feel like we really could be a BIG THING on our own. Facing the potential of dropping Gridspy made us really think about how much it meant to us, how much it had cost to develop and how much it could potentially be worth.

There is a certain value to Gridspy that is our contracting rate multiplied by the number of hours that we have worked. Add on to that the investments we have made in R+D, external contractors, hardware, etc. That is the "Cost Price" of the company. We know exactly how many dollars this is.

Somewhere between cost price and "LOTS" is a realistic price for Gridspy. Stephen and I set a price that I still believe is too low, a price that is increasing every day while we lower the company's risk and gain traction.

Characteristics of the offer that are red flags

This is a dangerous question to answer because it goes into more detail about the offer than I would like to go.

However, I can say that our purchaser was expecting things to move extremely fast after the purchase, essentially a death-march from day one. I wasn't looking forward to that particularly much.

Just like getting VC, you need to choose someone you will be happy working with for some time.

Now that we are back into the swing of things with Gridspy, I imagine that we'd ask for more from our next potential purchaser. We have built a pretty cool platform and I believe that we have a lot to offer the market over the next couple of years. Life is really good right now.

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