I'm in the interviewing process with a very small startup that is currently still in charge of their own product with adoption by a massive company (product is being sold by the large company, under the large company's name already, but still considered owned by the startup). The startup I am interviewing with says the product is being acquired, along with the startup team, by large company in 12 months, but large company wants to accelerate that due to unexpected product success. Does this sound too good to be true? What are some questions I can ask to protect myself from too much risk? Thanks!
Acquisitions fail more often than not. I had one signed and dotted, then in the integration phase they tried to fire half my team with no severance and then cut the price in half. It not only failed the acquisition but imploded the company because all our resources were spent preparing for acquisition. Don’t believe anything a startup says. Don’t be afraid to play hardball with your offer. Ask them about your equity and how it will vest with acquisition. Ask them if they are secure in the event the acquisition falls through, if they say “it’s guaranteed” then know you’re working with spoiled children and proceed with caution.
This is a ton of good info, thank you! Would you suggest doing this early on, or start negotiating when an offer has been sent my way?
Probably start early. They’ll definitely want to hit you with an offer then pull all kinds of emotional appeals to keep it at that range. Just have your number and try not to let them smokebomb you. A lot of times they’ll also say no and then call you back later when they’re desperate.
A company with a single point of distribution has zero negotiating ability when they want to get acquired. All the distributor needs to do is pause payments for 90 days.
If they get sold, how much $ will you get?