Hacker Bits, April 2016
HACKER BITS is the monthly magazine that gives you the hottest technology and startup stories crowdsources by the readers of Hacker News. We select from the top voted stories for you and publish them in an easy-to-read magazine format. Get HACKER BITS delivered to your inbox every month! For more, visit http://hackerbits.com.
HACKER BITS is the monthly magazine that gives you the hottest technology and startup stories crowdsources by the readers of Hacker News. We select from the top voted stories for you and publish them in an easy-to-read magazine format.
Get HACKER BITS delivered to your inbox every month! For more, visit http://hackerbits.com.
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
advice I got. I actually wish I’d<br />
hired them a little bit sooner.<br />
There were quite a few<br />
things we negotiated to change<br />
in the APA, but the two that took<br />
the longest were:<br />
• Confidentiality<br />
• Indemnification<br />
Confidentiality<br />
Basically I spent 2 weeks convincing<br />
them to let me write this<br />
blog post!<br />
No joke. The original terms<br />
were something along the lines<br />
of that I couldn’t tell anyone<br />
about the sale, ever, which is<br />
crazy since it’s going to be publicly<br />
available in their Q3 10-Q in<br />
about a month anyway.<br />
Thankfully they finally<br />
agreed to let me talk openly<br />
about most things in the transaction,<br />
which is why I’m able to<br />
write this post.<br />
Indemnification<br />
For people who aren’t familiar:<br />
indemnification means “if I get<br />
sued for something you did, will<br />
you protect me?”<br />
This is generally a reasonable<br />
term and is included in<br />
basically every M&A deal under<br />
the sun.<br />
Generally the pieces that get<br />
negotiated are 1. how long does<br />
it last and 2. whether there’s a<br />
liability cap.<br />
E.g. How long after the sale<br />
do I have to indemnify them,<br />
and in some disaster scenario if<br />
they got sued and lost, what’s<br />
the max I’d ever owe them?<br />
In the end we agreed on a<br />
length of time and cap that was<br />
comfortable for both of us.<br />
I will say this: I had to push<br />
back hard to get my terms on<br />
this point. Initially they wanted<br />
uncapped liability forever, which<br />
was unacceptable.<br />
The most tense moments in<br />
the entire 7-month process was<br />
on a phone call about this very<br />
subject.<br />
I told them I was going to<br />
walk away from the deal (after<br />
~6 months of work) if I didn’t<br />
get some sort of compromise.<br />
That was followed by roughly 45<br />
seconds of silence on the other<br />
side of the line, but eventually<br />
the guy spoke up and said he’d<br />
see what he could do.<br />
And I wasn’t bluffing.<br />
From this phone call we were<br />
able to finally agree on indemnification<br />
terms that were acceptable<br />
to both parties.<br />
4. Closing<br />
The best day of all.<br />
Once we’d agreed on every<br />
detail in the APA it was time to<br />
schedule a day to close the deal.<br />
In my case that meant signing<br />
and transferring the assets all<br />
in the same day (in high profile<br />
acquisitions you see online the<br />
announcements happen after<br />
the deal is signed but usually<br />
before it’s closed.)<br />
34 hacker bits