It's not uncommon for potential acquirers to feign interest in a purchase so they can derail your business for months while your competition (their actual investments) pull ahead.
A patent in and of itself doesn't prevent that from happening.
In the best position, I would assign a price as is no insider knowledge given. If they are interested they will buy because they already have research done prior.
They go around collecting data points to get a gestalt of current and future trends. I recall talking to at least two people who asked a lot of very general questions after segueing away from our product.
And nothing happens, 6 months later AWS launches your exact product.
Founders need to be extremely careful when talking to potential acquirers. Dollar signs cloud your vision and you need to understand why they're talking to you. It may be genuine interest or it may be deceit in order to gain a competitive edge.
Can you share an actual case? Such as, a startup that went through this.
Source: I worked for a flash sale company they did this to.
I'm not saying it doesn't happen but I'm just explaining what happens on the other side.
I've also seen some areas where we used a technical due diligence team so that there was no IP crossover and it turns out that the company that we wanted to acquire was either way too difficult to onboard due to the way that they built their systems or they just wanted way more money then we were willing to pay because our use of their systems was different than their grand vision and they were pricing on their grand vision. also in one of those cases we were playing the two companies off of each other for price and then decided not to build a product at all.
And sometimes like the atom bomb all it takes is a due-diligence person saying there isn't much here for everyone else to realize that it's actually quite easy to build but it was very expensive and difficult to prove that you could build it in the first place. See Groupon for example of the explosion of daily deal websites after Groupon proved that they could "make money" off of it.
I think that their intention was to duplicate what we were doing if they got on the other side and thought it was valuable.
Turns out the company was/is floating on investor money like so many startup ponzi schemes. I suspect Amazon just didn't think it was worth it.
Amazon went through an acquisition process and on the day of closing, as everyone was in the room and documents were being signed, Amazon reps came back from a break in the meetings and said “Oh sorry for the delay — we’ve actually got an internal team working on this already. Our mistake. We’ll still do the deal because there’s some value here, but we’re going to lower the price by 20%. Take it or leave it.”
(They did the deal, but man, f-that.)
1) Good luck getting $BIGCORP to sign that.
2) If you get #1 done, good luck enforcing it.
However the real protection is in the details in the amount of work that actually has to happen to copy a company. I've done technical due diligence work before and I really wouldn't be able to replicate what I saw in a 6 hour code review of 30000 lines of code any faster than I could just coat it from scratch. the most part you're doing basically the same thing you would do on a security audit of code which is looking for intellectual property theft or the overall quality of the code and things like did one person maintain the entire thing or was it actually a team effort which helps you decide who you want to acquire from the company. generally the whole point of these deep investigations is to mitigate risk for the purchasing company not to steal ip.
At the end of one of those investigations you basically say yes it's risky no it's not this is who worked on it this is who didn't this is my estimate for how long it would take to pull into our code base or move over power systems or here is a flexible I think that could basis versus how much technical debt I think there is. but really all they want out of you is is this a risk to buy this company or does it seem straightforward. Then you go back to your completely unrelated arm of the company and do your actual job.
Think about it this way: You always want to learn about opportunities and potential competitors. The biz dev team may say, hey we should maybe acquire this company, and the product people may say, no this is a good idea but we should copy it. It doesn't have to stem from a sinister intent.
The same can be true of interviews! Sometimes companies interview very senior people as a way of gathering business intelligence. People can be flattered and want to talk about their successes.
Microsoft is fond of workaholic coders and bizdevs. The number of those who are Big and Tall is small, and the number of workaholic coders who are also weightlifters is tiny. So you look at things that are completely obvious to you and the other person has absolutely no framework for contemplation. And if you are living by the Golden Rule (who has the gold makes the rules) then you don't have to learn anything at all.
But it sure would be nice for the rest of us if they did.
They were so notorious for it back then, that when they attempted to do it to Netscape, Marc Andreessen went into the meeting knowing ahead of time to document everything. That documentation was useful later during the anti-trust proceedings.
From the 2000 Wired article The Truth, The Whole Truth, and Nothing But The Truth:
> It was two months later, on June 21, that Reback received a call from Jim Clark, the chair of one of his firm's newest clients, Netscape. Earlier that day, Clark said, a team of Microsoft executives had visited Netscape's headquarters, met with its CEO, Jim Barksdale, its technical wunderkind, Marc Andreessen, and its marketing chief, Mike Homer, and offered them a "special relationship." If Netscape would abandon much of the browser market to Microsoft; if it would agree not to compete with Microsoft in other areas; if it would let Microsoft invest in Netscape and have a seat on its board, everything between the two companies would be wine and roses. If not ...
> "They basically said, OK, we have this nice shit sandwich for you," Mike Homer told me later. "You can put a little mustard on it if you want. You can put a little ketchup on it. But you're going to eat the fucking thing or we're going to put you out of business."
> The next day, Reback phoned Joel Klein, the former deputy White House counsel who had recently been named the second-ranking lawyer in the antitrust division, and persuaded him to send Netscape a CID for some detailed notes Andreessen had taken during the meeting.
> Asked by Tobey why he'd taken notes on the meeting, Andreessen replied, "I thought that it might be a topic of discussion at some point with the US government on antitrust issues." (During the trial, Microsoft would cite the comment as evidence that the meeting was a setup, and Netscape and the DOJ would retort that Andreessen was just being sarcastic. "Bullshit, on both counts," Andreessen told me. "I'd read all the books. I knew their MO. We were a little startup. They were Microsoft, coming to town. I thought, Uh-oh. I know what happens now.")