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Comment by russell | Hacker News Reader

I dont care I'm going to give you my uninformed opinion myself :-)

What is the financial condition of the acquiring company? Not being able to come up with a couple of million should be a red flag. What is the reputation of the company and its principals. Unfortunately, there are plenty of players willing to string you along to get your product cheap, lock you out, whatever. Dont do anything without the advice of a lawyer.

I hope I'm just being a crank but I learned these lessons from Jack Tramiel the SOB that ran Atari. Fortunately, I walked away before I got burned too badly.

I wish you the best of luck.

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> What is the financial condition of the acquiring company? Not being able to come up with a couple of million should be a red flag.

They have been completely open about that. They are about to close a $2.5M round, and have $10M in revenues booked for next year.

> What is the reputation of the company and its principals.

Good so far as I can tell, they seem like smart, honest guys.

> Unfortunately, there are plenty of players willing to string you along to get your product cheap, lock you out, whatever.

With this deal structure stringing us along hurts them as they have to pay more.

> Dont do anything without the advice of a lawyer.

Roger that.

hmmm, "almost" 2.5m round and $10m in revenue "booked for next year" is not that credible of a company. you are taking a lot of risk that the money does not come through.

if you sign a deal w/ everything "on the come" they can jack you around pretty hard.

venture backed companies _consume_ cash, they usually don't throw it off (6m extra in a few years) until later.

> hmmm, "almost" 2.5m round and $10m in revenue "booked for next year" is not that credible of a company. you are taking a lot of risk that the money does not come through.

What is the risk? Only that we end up back where we were before their offer, so far as I can see.

Their fundraising deal seems well underway, I've raised venture capital myself, and these guys know what they are doing.

> venture backed companies _consume_ cash, they usually don't throw it off (6m extra in a few years) until later.

It's a line item for them, they pass the cost directly to their customers.

Yeah.

There are plenty of risks ranging from the minimal (they waste a little bit of your time and you don't get paid) to rather extreme (they waste loads of your time for years and you lose your IP to legal wrangling).

Book a competent lawyer who has dealt with this sort of problem to nail it down and make sure the risk stays minimal. Ditto in the accountancy department. Everyone does their due diligence, everyone stays happy down the road.

With this deal structure stringing us along hurts them as they have to pay more.

Only if they actually pay you in the end.

They have to pay us on a quarterly basis, there are quarterly minimums.

Or they can simply renege on the contract, quarterly minimums be damned, and dare you to sue them.

No one's saying you're going to get screwed. Some people are saying you should take care not to be, and they're right.

I'm not sure how that could happen. We have the source code, if they renege on the agreement then we just go do something else with it and sue them if they continue to use it.

Sure. Most of what you lose is opportunity cost, time, bureaucratic overhead, and the possibility that they just take your code and go.

Yes, you could sue them. This is harder than it sounds, especially if they're optimizing to be sued -- companies that are out to screw people often optimize to be sued, roughly speaking.

Again, not saying "OMG! This must be pure evil!". Just, y'know, you sound awfully confident that nothing can go wrong and I don't think that's justified in this case.

For starters, be prepared to walk away like that.

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