Like many things in life, I think it depends.  Ultimately in my experience in depends on the why.

Let me give you two personal examples.

In my first start-up:

  • Before we got up and running, I went to our ultimate acquirer and asked them to buy our technology for $50,000.  They said no.
  • Two months later, we’d signed one of their largest customers.  They offered to buy us for $5,000,000.  We said no.
  • The next month, they flew us out to HQ and met with everyone and offered to buy us for $9,000,000, pre-funding.  We said Sort of Yes.  But … they didn’t close it.
  • Instead, they offered to invest.  We said no.
  • Two months later, we’d closed $6m in contracts with their customers.
  • Eight months after that, they bought us for $50,000,000.

We were an existential threat to their core business, at least a part of it.  Until that was no longer the case … the interest was always there.

On the other hand, the second time, it was different.  We’d known our acquirer for 5+ years but they’d never made an offer to buy the company.  When they finally did, it was with the direct discussion that if we didn’t sell … they buy someone else in our space.

So I do suspect that was a one time-ish thing, for a variety of reasons.  If we’d said no, they would have bought a smaller competitor (most likely).  And importantly … by the next year … the strategic imperatives likely would have changed.  In fact, they did.

So my uber-learning is there are two types of acquisitions here.  CEO-drive acquisitions of “jewels” that the CEO always wants, and will see as accretive for years to come at least.  When that jewel comes on the market — the CEO will still want to buy, even 1, 2, 3 years down the road.    Especially founder CEOs.  Founder CEOs are always thinking 3, 4, 7 years down the road once they are at scale.

But an SVP-driven acquisition is usually done to fill a hole in this year’s plan.  The SVP may be planning years down the road … but her #1 priority is hitting this year’s plan.  And the “simplest” and fastest way to fill a hole in that plan is a quick acquisition.

Thing is, next year … the hole may be different.  ‘Cuz the SVP-level KPIs and plan may well change.

So … if you are a jewel for the CEO, be cool when you say no, you’ll probably get another shot.  But if you are a tuck-in for an SVP … when you say no … that may well be it.

A little more here:…

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