Thoughts on Early Talks With a Potential Acquirer

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David Cummings on Startups

Over the course of the five-and-a-half years Pardot was in business as a standalone company, we received a half dozen overtures from potential acquirers with differing levels of seriousness. After a startup gains quality market traction, potential acquirers will start sniffing around. Now, most of the inquiries are just to gather information for a corp dev spreadsheet, but occasionally there’s more to it.

Here are a few thoughts on early talks with a potential acquirer:

  • Remember that there’s little chance a deal will happen, so try and keep the expectations low (don’t start dreaming of a big pay day as it’s very distracting)
  • Use the interaction with a potential acquirer as a learning experience
  • Even if you don’t want to sell the business, it’s a useful exercise to learn what acquirers look for in a startup
  • Continue to grow the business and don’t lose sight of building a great company
  • Mutual NDAs are standard but…

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