Venture Hacks

Suzanne Dingwall Williams is publishing M&A hacks on her excellent blog, Venture Law Lines. She call the series: ‘Selling the Startup’,

Selling the Startup: Can you sell your subscriber base?

“Recently, a new client received a very favourable takeover offer for her business, including its subscriber base. Problem: the privacy policy did not permit her to provide the account information for her subscriber base to the acquirer. Same thing with the user license: it was non-transferable. We had to go back and rectify the matter in a ponderous way before closing.”

Selling the Startup: Providing Price Protection in the Term Sheet

“As a general rule, [M&A] term sheets provide for price adjustment based on revenues and a closing balance sheet, and based on the results of the buyer’s due diligence (this is really a price reduction clause, as no one ever finishes due diligence and concludes “By God, they’re really onto something here. Raise the price!”). Here are three other areas where you, as seller, need to consider providing for some price protection…”

A couple more gems from her excellent blog:

On Being An “Off the Grid” Startup

“The reality is that 95% or more of North American startups are created outside of Silicon Valley. Many are created in fairly robust business generation centres such as Boston, and emerging centres such as Chicago and Raleigh-Durham. Just as many are created in regions where the startup infrastructure is small or non-existent. Do the practices, deal terms, and operational decisions typically made by startups in the overheated Valley, with its cadre of serial entrepreneurs and super-angels, have any application for the rest of us, who are off the Silicon Valley grid?”

If Venture Capital is Dead [in Canada], What’s Next?

“Venture capital in Canada is no longer an industry, but a financial product offered by only a handful of players…

“When someone finally says this, I’ll agree. But I’ll also say that, as someone who advises entrepreneurs, I don’t particularly care. All this tells me is that companies will now use different financial tools to feed growth, using business plans that are not shoehorned into the somewhat artificial venture capital model for growth—i.e., in and out in 3-7 years.”

Suzanne’s resume includes roles as Founder of Venture Law Associates (a Canadian law firm with flat rate service for inventors and early stage companies), Principal at BCE Capital, and Senior Counsel at Nortel.

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