> Other issues: - You get paid more if they take longer to pay => You're going to work for a company that you hope doesn't blow up tomorrow (because you get paid more if they blow up in 4 years). => This is a dangerous spot to be in; your incentives are not aligned with theirs.
Yes, I did point it out to them. Their response was a polite version of "that's our problem".
> - It might be tempting to think that the acquirer could pay you with the proceeds of their next round even if their business does not take off. But $6M in short-term debt will likely scare off VCs who might fund them in their next round...
I think if the business doesn't take off, we get our technology back and we keep whatever they've paid us to-date. It doesn't seem like a terribly bad worst-case-scenario.
> Yes, I did point it out to them. Their response was a polite version of "that's our problem".
But it's not actually just their problem, because you don't get paid if they don't succeed...
I'm sure you've already realized this. :)
> I think if the business doesn't take off, we get our technology back and we keep whatever they've paid us to-date. It doesn't seem like a terribly bad worst-case-scenario.
Good point. Still the opportunity cost of your time to consider (all that time you spent watching them fail, you could be spending building your own business) and your technology's shelf-life.
Also, it might be difficult to build a business around tech that failed somewhere else (even if your acquirer's failure had nothing to do with you or your tech). I don't know the specifics of your situation, but I would imagine good early hires might be wary, potential investors would be skittish, etc.
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Sorry, some more:
> Other issues: - You get paid more if they take longer to pay => You're going to work for a company that you hope doesn't blow up tomorrow (because you get paid more if they blow up in 4 years). => This is a dangerous spot to be in; your incentives are not aligned with theirs.
Yes, I did point it out to them. Their response was a polite version of "that's our problem".
> - It might be tempting to think that the acquirer could pay you with the proceeds of their next round even if their business does not take off. But $6M in short-term debt will likely scare off VCs who might fund them in their next round...
I think if the business doesn't take off, we get our technology back and we keep whatever they've paid us to-date. It doesn't seem like a terribly bad worst-case-scenario.
> Yes, I did point it out to them. Their response was a polite version of "that's our problem".
But it's not actually just their problem, because you don't get paid if they don't succeed... I'm sure you've already realized this. :)
> I think if the business doesn't take off, we get our technology back and we keep whatever they've paid us to-date. It doesn't seem like a terribly bad worst-case-scenario.
Good point. Still the opportunity cost of your time to consider (all that time you spent watching them fail, you could be spending building your own business) and your technology's shelf-life.
Also, it might be difficult to build a business around tech that failed somewhere else (even if your acquirer's failure had nothing to do with you or your tech). I don't know the specifics of your situation, but I would imagine good early hires might be wary, potential investors would be skittish, etc.