That sucks. I spent a very unpleasant 9 months in the early '00s at a startup I founded bouncing from big valley tech co to big valley tech co chasing acquisition deals, each of which consumed 3-4 months of effort and attention, each of which involved us eventually getting into the mindset of being acquired by that company, each of which failed.
Deals fall through; that's just what they do. Yours fell through because a director at the acquirer objected. Others fall through because the market shifts suddenly, or because a competitor to your acquirer spooks them by picking up one of your competitors, or because you lose a key person, or because their business development person leaves, or they get a new CEO, or because a bluebird deal happens for them and they pick up some totally unrelated company that ices you out of their plans for a year.
You're lucky the acquirer told you the deal was dead. That doesn't always happen; dead deals can limp along for months and months, especially if you don't know how to qualify them. This is a reason people hire "business development" people for their startups, but frankly having a BD person might just mean you'll be exposed to more of these horrible prospective deals; if people aren't banging down your door, it's not in a BD person's interests to qualify deals strongly.
My advice is, go into every potential acquisition as if it could not possibly happen. Maximum jaundice! Assume it's going to fall through. Shield your team from the talks. Decline to introduce the acquirer to most people on your team until things have materialized. Talk to people who have sold companies before about the steps their deals went through so you can judge what "real" is (it's probably not just "signed MOU"). Certainly don't expose yourself before the CEO has signed off.
A possible added benefit to this posture is that it also plays hard to get, which while it won't actually increase the valuation you get might keep you from blundering into unnecessary concessions.
My guess is you weren't really all that far into the deal, because no part of your posting talks about vast and intractable legal fees. So, cheer up: you could have been a couple more steps down the road, and a couple hundred thousand dollars in hock to the lawyers too.
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That sucks. I spent a very unpleasant 9 months in the early '00s at a startup I founded bouncing from big valley tech co to big valley tech co chasing acquisition deals, each of which consumed 3-4 months of effort and attention, each of which involved us eventually getting into the mindset of being acquired by that company, each of which failed.
Deals fall through; that's just what they do. Yours fell through because a director at the acquirer objected. Others fall through because the market shifts suddenly, or because a competitor to your acquirer spooks them by picking up one of your competitors, or because you lose a key person, or because their business development person leaves, or they get a new CEO, or because a bluebird deal happens for them and they pick up some totally unrelated company that ices you out of their plans for a year.
You're lucky the acquirer told you the deal was dead. That doesn't always happen; dead deals can limp along for months and months, especially if you don't know how to qualify them. This is a reason people hire "business development" people for their startups, but frankly having a BD person might just mean you'll be exposed to more of these horrible prospective deals; if people aren't banging down your door, it's not in a BD person's interests to qualify deals strongly.
My advice is, go into every potential acquisition as if it could not possibly happen. Maximum jaundice! Assume it's going to fall through. Shield your team from the talks. Decline to introduce the acquirer to most people on your team until things have materialized. Talk to people who have sold companies before about the steps their deals went through so you can judge what "real" is (it's probably not just "signed MOU"). Certainly don't expose yourself before the CEO has signed off.
A possible added benefit to this posture is that it also plays hard to get, which while it won't actually increase the valuation you get might keep you from blundering into unnecessary concessions.
My guess is you weren't really all that far into the deal, because no part of your posting talks about vast and intractable legal fees. So, cheer up: you could have been a couple more steps down the road, and a couple hundred thousand dollars in hock to the lawyers too.