A deadline was looming, and if we didn’t sign the deal by 5pm, we would get sued for $30m
In the heady days of the dot-com era, I was a co-founder of an enterprise software company that was going quite well. My co-founder and I had moved to San Francisco to lead our US expansion, and we were enjoying the crazy pace of those pre-crash times.
As we grew, we started fielding offers of acquisition.
We had a good product, and larger companies could see how it strategically fit in their portfolio. It is always exciting to be wanted and the validation of our hard work was rewarding. One company in particular, with an experienced and charismatic leader, had been pursuing us for some time and had given us a term sheet for an all-cash acquisition of our company.
Once we got into deep diligence, we discovered that charisma was all that the acquirer had. The house of cards would surely fall over and we didn’t want to be inside. Our withdrawal precipitated many others and soon enough the entire thing fell apart — much to the rage of their charismatic CEO.
In an attempt to rebuild, he assembled a team of attack-dog lawyers and promptly threatened to sue us for $30m if we didn’t proceed with the original plan.
After a few days of existential dread, and much to my co-founder’s credit, we boldly told the CEO what he could do with his lawsuit — in the end, it was never filed. It was still a messy situation, and many other lessons were learned in the clean-up, but the big lesson was clear.
If you’re doing something because of the fear of avoiding an outcome, are you sure the place you will end up is actually better? Take the time to be sure.
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