On December 9th, Venture Archetypes and Greenberg Traurig pulled together a panel of some of the top entrepreneurs and most active acquirers in Silicon Valley to answer your questions about start-up M&A. So whether you’d like to know what the serious players are looking for or how to position your start-up for a healthy acquisition, you’ll find the wisdom right here!. Read the rules.
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Regarding offers, how do you decide on cash versus Equity? What are the different considerations?
Twitter (sold Mixer Labs)
|One acquisition structure that some companies have started doing, which is one of the things that Naval mentioned, is splitting the founder and investor incentives. The investors receive a cash return and the founders and employees are given stock. Sometimes that happens as well.|
Director, Corporate Development
|Part of the decision for us is the cost of each from our side and what you’re looking for. Obviously we’re a cash rich company so cash is relatively cheap for us versus diluting our stock more. I think for Facebook it would be the opposite…maybe not. |
Manager, Corporate Development
|We just do what the Entrepreneur wants mostly [laughter]…it’s sort of true actually. If we’re willing to pay $100 for a company – obviously I’m using silly numbers, then that’s what we’re willing to pay. So if someone wants cash because they need to buy a house or pay XYZ loan, that’s fine. We still want people to vest and want people them to be there for time, but we don’t really care.|
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