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Comment by socalnate1 | Hacker News Reader

Two quick thoughts on this.

1) The amount of transparency that this company shows is insane. I have a hard time imagining any one else in this situation sharing the way they do. I hope it works out for them long term.

2) The due diligence work they did for this deal was absolutely not a waste (even if they never sell the company). Having gone through this process once will make it orders of magnitude easier if they sell in the future (especially gathering and organizing documents from the very early stages). Even if they don't sell, the process would have shown light on potential liabilities and issues they hadn't even been thinking about. This is helpful regardless of who owns the company. Maybe not worth the time and money; but definitely not a waste.

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It wouldn't feel great seeing this as an employee of the company. The only reason you are not sold to the highest bidder was because the ceo got played.

I fucking wish some of the companies I've been at sold to the highest bidder when they had the chance.

Exits are better than layoffs.

There is always a non insignificant chance that exits will be followed by layoffs

True, but layoff + severance < layoff + severance + liquidity event

How about cases where due to liquidity preferences, no one but founders get money at the liquidity event? A small exit is often 0 for employees.

then you worked at a bad company with a bad outlook and should have been prepping to leave anyway?

Why? Do you have previous experience selling a company? If you were in his place, what would you have done differently to avoid being "played"?

> The only reason you are not sold to the highest bidder was because the ceo got played.

The truth is that the only reason you aren't sold to the highest bidder is that there was no highest bidder interested in buying. Just people motivated enough to do the courting rituals required to get a peek beneath the sheets.

I think it's a company culture thing. I mean, I could have kept it buried and just hope nobody at the company found out but that's not how we roll. ¯\_(ツ)_/¯

> Even if they don't sell, the process would have shown light on potential liabilities and issues they hadn't even been thinking about.

If I recall correctly, some VC's make their companies put together quarterly reports of similar nature to a normal publicly traded company. It sounds like it would have similar value.

Doing so requires significant thought and focus, and provides a structure and cadence to the business.

Common practice from VC is to do a 3rd party financial audit - billed to the startup in the end. Very expensive, but as you mention, it helps uncover potential ticking time bombs.

It's easy to complain about a heavy, expensive finance audit, but startups commonly are setup or practicing mildly to extremely incorrectly. It's just too risky not to do it.

Tech audits seem to fly under the radar a lot. Post deal, I've had one principal complain to me a portfolio company was using a single table for users & bookings just more columns - what. Ruined the company for 14 months to fix the tech with all the deployed money and the business never recovered. Extreme, but there should be someone looking.

"was using a single table for users & bookings just more columns" Could elaborate more on this point please ? Thanks.

They were a ticket/booking platform for concerts in ASEAN.

I don't know much else beyond they had a single table which contained both users and bookings where new bookings were just in new columns next to the user info. If the user w/ the most bookings had 51 then they had at least 51 columns. Every time the max bookings user added a new booking they would add more columns - what.

If the DB data structure of the core business looks like that, you can imagine the rest built on top looks absolutely terrible.

Diligence would've easily seen this, but it was never performed. The VC never made that mistake again. Trust but verify.

Thanks so much for the kind words!

Totally agree the diligence work, in the long run, wasn't a waste. At the very least, we organized a lot of documents I'd forgotten about.

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