There is a lot more to being acquired than hiring a lawyer and pumping out a set of long-term projections. Deals fall down for unexpected reasons, and at times for reasons expected by the suitor but not by the target.
AskTheVC has started a series on the subject, and it begins like this:
Potential acquirers are typically trustworthy and sincere in their intent when conducting due diligence, with making an acquisition the goal rather than gathering competitive intelligence. However, some may enter the process with both goals, and a few may actually have bad intentions.
If you’ve done dozens of deals and are now comfortably in the plus column (meaning collection of Ferraris in the garage), you might be thinking “I just throw a break-up fee in every term sheet to solve those types of problems.” Yes, economic incentive to close a deal does work, and the latter types of acquirers AskTheVC mentions will probably get turned away pretty quick if access to the deal is “priced” accordingly. Unfortunately, the budding startup jockey or middle market owner-operator rarely has the opportunity to install breakup fees. And don’t get so comfortable with your prized lawyer’s writing skills that you begin believing a bi-lateral confidentiality agreement is all you need either.
Rather than steal any thunder about to roll over the hills, I suggest you follow these guys over the next few days – you may learn something.