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Steve Blank: “Why Continuous Deployment May Mean Continuous Customer Disappointment”
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Answer by Jason M. Lemkin:

I’m sure others will have different opinions.

In my experience, the acquirer usually will not want to meet or deal with the board members, especially once they are in close-a-deal mode.  They don’t care — they are irrelevant to the go-forward future of the product, and are merely folks who receive consideration in the deal.

But if you don’t have experience here, I think it’s potentially a good idea.  Your board member should have more experience, and importantly, can also act as the Bad Guy to some extent where it may be harder for you, as someone who has to work there after the deal closes.  If you haven’t done it before — and even if you have — you may well need help to figure out the best deal and best process.

Just bear in mind your interests may not be 100% aligned.  Your investors:

  • May not be that excited about the sale if they think you can Go Bigger, or
  • By contrast, they may push for it a little over your head, if they are more pessimistic than you are, and/or
  • They may try to push for the absolute maximum possible price, where you may be OK with say 90% of best price in exchange for not increasing risk (common case, Snapchat aside); and /or
  • Perhaps most commonly, the acquirer may want to shift some overall deal economics to the key employees (e.g., via stay packages, time-outs, earn-outs etc.) over the investors — and the investors may be strongly opposed.  E.g., they may want to pay say $50m — but have $10m of that packaged as stay bonuses for key employees and have the nominal purchase price be $40m.  As CEO, you have an obligation to all your shareholders and for full disclosure.  But this is a really tricky dynamic in smaller deals.  At a practical level — it may be better for you not to have the board in all of these meetings.

So get the help if you need it.  I recommend it.

Just remember that at the end of the day, Zero Sum games are much easier to play with two players.


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lawpal2:

Amazing article in the New Republic - goes right to the heart of the matter:

There are currently between 150 and 250 firms in the United States that can claim membership in the club known as Big Law, the group of historically profitable firms that cater to the country’s largest corporations. The overwhelming majority of these still operate according to a business model that assumes, at least implicitly, that clients will insist upon the best legal talent instead of the best bargain for legal talent. That assumption has become rickety. Within the next decade or so, according to one common hypothesis, there will be at most 20 to 25 firms that can operate this way—the firms whose clients have so many billions of dollars riding on their legal work that they can truly spend without limit. The other 200 firms will have to reinvent themselves or disappear.You can’t imagine the terror when the money dries up.”

LawPal is helping lawyers reinvent themselves and the law firm in order to meet the needs of their clients in a rapidly (and irrevocably) changing legal market.  

Unvarnished, incisive, sobering.

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Challenging SEC rules on general solicitation: Good policy, political mistake?
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