In episode II of Divya Gugnani’s Founder Stories interview with host Chris Dixon, the two dive into M&A, a topic that both founders know well. Dixon’s company Hunch, was recently acquired by eBay and Gugnani’s company, Send The Trend was recently acquired by QVC.
On being acquired, Gugnani tells Dixon that she was approached much earlier than she had anticipated and it was a “really intimidating and scary” experience. She adds, “there were really two directions; do I go down this route and potentially distract myself from the base business that is growing … or do I just keep focusing on my business and have that kind of bravado that you know what, it is going to be worth so much more later?”
Gugnani came to the realization that the opportunity “to build a big business” within a larger organization was too much to pass up and says when “I was convinced it would work, I started putting the time and energy into that process.”
She says during the process “we took every single meeting with every single decision maker as an opportunity to sell them on our opportunity and why they wanted to work with us and that ended up creating multiple champions at multiple levels for us – which I think had a network effect of how our transaction got done rapidly, efficiently and well.”
While Gugnani was fortunate enough to experience smooth sailing, Dixon notes he’s seen instances where lawyers get hung up on matters deep into negotiations and “people just fall apart in that process.” He adds “that’s scary because at that point you’ve probably spent months, spending almost all your time on this, you’ve disclosed everything about your business to them literally, every document.”
Gugnani agrees saying “a deal is not a deal until the wire goes though” and compares this situation to “standing naked in Times Square.”
Make sure to watch the entire video to hear more, including Gugnani’s and Dixon’s take on keeping things close to the vest during these deliberations.
Episode I of this interview is here.
Past episodes of Founder Stories featuring leaders from Tumblr, KickStarter, BirchBox, ZocDoc, Charity: Water and many other startups are here.