I'd say it's not fu money. We're talking total deal size of < 40mm split 3 ways (much of that isn't up front, but earned out over time).

I do think I'd regret not following through, you're right. The question is whether that regret is worse than multiple years of hating work. I guess I'm probably the only one who can answer that.

I just took a week off and went out of town. Although everyone did manage to leave me alone while I was gone, people tried to do my job because they didn't want to keep customers waiting. That resulted in a lot of problems when I got back (they had no idea how to do my job).

I'm still paying for it now. Maybe I do just have to force another > 1 week break and deal with the consequences later.

Thank you for taking the time to share your thoughts. It is helpful.

That's $13 million each. If that doesn't count as FU money I don't know what does. Even what you'll get upfront might already be in the FU money bracket. Calculating that threshold actually is quite easy (as per Mr. Money Mustache): If you have more than 12 times your annual expenses in assets you never have to work again.

12 times annual expenses in assets is almost certainly too little. The usual number is 25 times (assuming a 4% safe withdrawal rate).

It's more like 25 to 33x annual expenses.

> That resulted in a lot of problems when I got back (they had no idea how to do my job).

There's your problem right there. You need to start training someone to do your job so that you can go away without having things fall apart. You need to do this regardless of whether or not you want to walk away because you could get hit by a bus tomorrow. Your main goal as a founder should always be to insure that the company can get along without any one particular person, including you. If you don't know how to make that happen, hire someone who does.

P.S. I've been a principal in half a dozen startups, so I've seen it all. If you want to talk you will find a link to my contact info in my profile.

Money stops to matter when the stress gets too high and you still have to close and all that takes plus stay years on the earn out. I think the thing you have to realize is that you are the company. The past is past, so can you train (and hire) people to do the things that you are currently essential for? If you can't, do you know for a fact that the acquirer will let you hire and train those people? If not, you need to find a way to cash out less in exchange for a maximum of 6 months of training people how to do what you do now. It could be that 6 months isn't enough time. If the company has no value without, then the company has no value, only you do. (exaggerating a little for effect)

$10 million is definitely FU money.

Ya, $10m is comfortably above fu money even in silicon valley or NYC.

https://youtu.be/xdfeXqHFmPI

The size of the house you own and get to say fu from will vary, but the sentiment is the same as long as you own it.

That's FU money. Even 25% of that would be FU money.

Invested with reasonable money managers, you'll never again have to trade your life for a paycheck.

Finally, train your replacement(s).

I went through a smaller acquisition which had milestone based earn-outs. Are your earn-outs time-based or milestone-based?

Mine were milestone based and I negotiated for 25% to be time-based. The company underwent a big re-org and the new leadership had their own projects which were prioritized so the milestones were never realized.

Just some food for thought while you're nearing LOI stage.

If you're being acquired, then somebody wants to see your work live on. But you seem to be a fairly large bus factor. If someone is spending 40mm to acquire you and your team and your product, is it possible that one of the priorities becomes hiring someone or a small team that can bring some more domain knowledge in? You're obviously critical to this operation, but no one wants a team where one person being out for a week means customers are sitting around waiting for you to get back.

If you can find a way to live on a salary of $300k per year, then ~$10M is definitely FU money. You can invest that money and safely withdraw 3% for the rest of your life.

Maybe try a staycation next time. Hang out in the office, let people do your job, watch over their shoulders and instruct them, but leave your own PC turned off for the duration. (And definitely don't do 8+ hour days).

In fact, maybe make that into a company policy where you do that one week per quarter such that the company doesn't fold if you get hit by a bus. Employees may actually like the idea.

> Does the acquisition involves you signing a contract and being forced to stick around for a few years?

Yes they range from 3 to 5 years, with much of the compensation coming from future earnings.

Don't take it the wrong way, but there are some unresolved problems that most probably caused your current feelings, you should make a list of them and try and solve them.

It is not possible - no offence intended - that you managed to lock yourself in a position such as the one you described, where your product/company/service/whatever can't live one week without you in the office.

And by the same token it is not possible that someone - knowingly - is going to give you money for something that can only work if you are not only at the steering wheel, but also doing the most relevant work all the time (it would be far too risky).

Now that is more clear that the offer is actually largely linked to future earnings (and obviously your future work) it sounds a lot like they are buying you and your competences (and not your company/whatever).

Maybe you should really talk first with someone that can help you with your (momentary) crisis (that would be psychological support, if you can stay away from prescribed drugs would be advisable) then - as soon as you have regained some objectiveness and a peaceful state of mind - take some time to talk with your immediate associates (be them co-founders, executives or employees) and try to make a plan to solve those problems (which seemingly essentially revolve around either missing resources in the company or missing attitude to delegate some of your work).

Sounds like you're talking to more than one potential acquirer, yes? That should give you more negotiating leverage.

Seems to me that if you want to cut the earnout to 1 year in exchange for a smaller total package, that should be something they would entertain.

Another option is to forget the acquisitions for the moment and bring in someone else to run the business, technical enough that they can pick up the details quickly. Bring them in as a co-founder; offer them maybe 20% of the company (with 4-year vesting that accelerates on acquisition) and explain that you want to turn over the day-to-day to them. Once they're comfortable running the business, you can resume trying to sell it, or just sit on a beach and sip mai-tais.

"much of the compensation coming from future earnings" why bother selling if you are stuck in the company anyway? You are saying: I will give the company to somebody and that person will give me its price when and if he sells. This is a ripoff, not an acquisition . It doesn't work that way.

I would not agree to those terms because chances are you will get much less than you expect. Hire help and train and take more time off.

Try to negotiate a clean break for 30% of what you were going to get, and find someone to replace you.

Can you negotiate a small sabbatical early in that period?