Sell Your Company, Not Your Soul – Thoughts on Getting Acquired

The following post was contributed by Mo Yehia, co-founder of Sqoot. This originally appeared at

I’d dreamed of this day countless times, yet when it came, I didn’t share the news on Facebook, make an unforgettable video, high-five teammates or investors, or publish the requisite ‘we got bought’ announcement on TechCrunch.

I got on base with my first exit, but it felt more like an error than a true base hit. While I’m stoked to have delivered value to investors, customers, and Clutch, I expected far more. Here’s what I learned:

Beggars can’t be choosers. We saw a seven figure deal evaporate into thin air because we had no leverage. Buyers toyed with us like a great white toys with a seal prior to devouring it. Ultimately, while most investors made nominal money, others lost big time. Personally, I didn’t make Maserati money, but maybe enough for a tricked-out, year-old Accord.

Watch the market like a hawk. We didn’t eat the hors d’oeuvres when they were being passed. The coupon landscape changed quickly and dramatically. There were massive exits and fundraises, but we were always late to the party.

Make money. Pay yourself. We kept our burn low and ended up burning ourselves out. We served a lot of customers at an unsustainable price point. My co-founder and I amassed tens of thousands of dollars of debt, not to mention legal fees that rivaled the average American’s salary. Financially, I was better off in investment banking, despite an implied hourly wage equivalent to that of a McDonald’s manager. I’m not lovin’ it.

Relationships trump revenue. I alienated investors, family, and friends. I emailed them when in need and neglected them otherwise. My relationship with my co-founder will never be the same as it was. There was no yelling or fist fighting, but I miss the old days.

Be hyper focused. The coupon space was frothy as we entered the market. We wasted time and energy on a few pipe dreams that didn’t pan out as expected. Instead of re-focusing on customers, I chased partnerships and profit like Gollum chased the ring. These distractions were hardest on our customers. They got the shaft and were lost in the shuffle.

Listen unconditionally. I mostly ignored the teams’ grumblings, and when I noticed it was too late. We didn’t communicate about the things that really mattered. From the beginning, it was unclear why we were in this. We never stopped to ask, “what do we really want to work on?” Eventually, when we did, enthusiasm waned and attention scattered. When things got tough our bonds didn’t endure.

Ultimately, these were lessons of inexperience. When the deal closed, only one person, my lawyer, called to congratulate me. Billable hours for sure. I treated myself to a gourmet donut and full day Law and Order marathon. I called a dozen friends to apologize for being a dick. To my chagrin, most didn’t return my call. And now, I’m doing it all over again with Sidewalk.

Is this what it’s like to sell your company? To better mistakes next time.

Mark Saldaña

Resident marketing manager and baker at 500 Startups.

Never miss a beat

  • Dave McClure

    Mo, that’s a tough but honest tale to tell… i’m sure you guys got more experience than dollars.

    my first exit was also a lesson in the school of hard knocks. after 3 years of busting my ass (and 2 years before that doing independent consulting), we had build a business of ~$2M/yr in revenue, but operating at a slight loss. we had a rather small and somewhat desperate acquisition for <$1M total (earnout over 18 months), which resulted in a 2x return for my family & friends investors, some modest checks for my co-founders and remaining employees, and perhaps $250K for myself. better than going bankrupt, but prob not enough to make up for only paying myself 50% market salary for last 3 years… and certainly not enough to offset turning doing jobs + stock options at Microsoft, Intel, or other rocket-ship valley startups.

    i learned a lot, i got a lot of experience (mostly in what not to do), and with that $250K i ended up paying off debts and putting a small down-payment on a condo in SF. it wasn't a big payday, but it was better than being in debt or filing for personal bankruptcy.

    but, i did manage to eke out a small win in the face of a potential big loss. for that reason only, i earned some grudging respect from friends and business partners who thought i was never gonna make it. somehow proving them wrong and getting "on base" as you say (i say i struck out but stole first), was perhaps worth 5-7 years of tough lessons.

    in any case, it helped build a lot of character, and prepare me for the future.

    cheers & get back on that bike, dammit.