Good advice! But how do you respond to indications of interest? Just ignore them and say you are not interested until they are literally waving cash in front of you, begging to aquire you, or require that they follow specific steps to indicate real interest, such as a Contingent Offer with a due diligence deposit, breakup fee, and strict NDA?
How is this done with the lots of sub $10M acquisitions that happen? Clearly deals are being done here, so I'm sure it doesn't pay to ignore bona fide offers, but obviously there's a lot of time wasters out there too.
What do you advise your YC portfolio companies to do here? Just ignore all offers or refer them to their lawyers or investors?
Our first advice is not even to talk to acquirers unless you want to sell the company now. It's remarkable how often founders who don't actively want to sell will talk to acquirers anyway, just to see if they'll make some offer too good to refuse. But acquirers never do that. When their offers are surprising, they are always surprisingly low. And the conversation is far from zero cost. Very far. That's the other big mistake.
My assumption would be if an acquirer is willing to make you an offer too good to refuse and you aren't actively looking to sell, then not talking to them would be the best way to actually spur that offer.
How is this done with the lots of sub $10M acquisitions that happen? Clearly deals are being done here, so I'm sure it doesn't pay to ignore bona fide offers, but obviously there's a lot of time wasters out there too.
What do you advise your YC portfolio companies to do here? Just ignore all offers or refer them to their lawyers or investors?