Dear SaaStr: What Are Some Signs My Startup Might Be Getting Acquired?
Dear SaaStr: As an employee of a start-up, what are the signs that we are about to be acquired?
Turns out, if you are in a small enough company, the signs are obvious if you look carefully. But you do have to look carefully:
CEO and controller / finance person working together much more often than usual. Because the BigCo needs like 10,000 different reports.
BigCo guys (from acquirer) walk into office and act "all cool". They're doing their on-site diligence. When an SVP from BigCo walks in and tries to act cool, they're trying not to blow it. This is subtle but if you have high EQ you can spot it every time. They act very differently from BigCo VPs coming in to do a regular business deal (when they usually make it very clear who the Alpha Dog is).
CEO and VPE off to off-site meetings together — and they never do this. Not a customer, just a "meeting". They do this for due diligence. You can't tell if it's the VPS. The CEO and VPS are always off working with customers. But if it's the VPE ... and they're off to "a meeting at Google" ...
CEO suddenly stops caring about things they used to care about. Especially hiring. No longer cares if a certain key hire gets made this month? It's because she has bigger fish to fry. If you see substantial priority changes ... you know ... something's up ...
The smaller the company, the easier it is to see these things if you're looking.
Dear SaaStr: What happens after you raise VC and bring on your new partners?
Things change.
A few thoughts if you haven’t raised venture capital before:
1. Remember you have to prove yourself, still. Yes, you got the $$$, and they really can't get it back, and probably they can't fire you if they don't control the board. But your VCs barely know you. You still have to prove yourself as (x) a great visionary, (y) able to recruit and retain a great team, and (z) a careful custodian of the investors' funds. It will probably take you 6-9 months to prove yourself, longer if there are bumps along the way.
2. Remember the Board meetings are as much or more about your team as you. If your Board just wanted to hear your thoughts, they could just meet with you 1-on-1. Make sure each VP/functional head presents at the board meeting, and give them time, and don't talk over them. And help them prep. Your VCs will learn a lot about the company, and about you as a leader, listening to them, not you.
3. Be extremely transparent and data-driven. And get them detailed Board packs and metrics at least 3 days before each Board meeting. Initiall, your VCs won't really know how transparent you are -- or if you are hiding things. Share everything, at least, share all metrics and data. And provide very clear zero-cash data projections (see Knowing -- and Sharing -- Your Zero Cash Date).
4. But don't share all your fears. Highlight risks for your VCs, but even with them, don't let them see you sweat. If they see you sweat, they'll get scared/nervous too, and it will spiral downward.
5. Take all the VCs' feedback, but be careful what you implement. Listen respectfully, and don't openly disagree. But if you don't think their advice is worth acting on, let them know later 1-on-1 why. Don't blindly implement a VC suggestion that takes a lot of work that you don't believe in.