Q: Suppose the CEO of my competitor contacts me, interested in acquiring my app (privately owned). What steps would I take to avoid giving away proprietary information before the sale closes, if ever?
Meet all your competitors. You never know where it will go:
- It may help you head off a conflict later. There can be a lot of drama as competition heats up. If you know the other CEO, a quick phone call can often head off some issues.
- You might combine the companies later. Every startup I’ve co-founder or been a part of, a competitor has offered to acquire us.
- You might find some way to work together. Competitors today sometimes get even more competitive. But other times, their missions can diverge over time.
- You have someone now you can call if there are issues. See the first point. It’s always better to know the person on the other side.
- You’ll probably in the end just both gain respect for each other, and for the market overall. The best competitors genuinely respect others with the same passion for the customers and markets they do.
- Who knows. You just don’t know what the future holds for either of you.
Of course — keep the super confidential stuff secret. But anything anyone could find with a Google search, or close to it, just share it.
There’s not as much to hide as you think, and often something to learn.
In fact, just the other day a startup I invested in got a nine-figure offer to acquire them from an adjacent semi-competitor. They not only knew each other a bit, but the adjacent semi-competitor was even a personal angel investor.
You just don’t know.
(note: an updated SaaStr Classic answer)