What happens during an acquisition process?

Chris Nguyen / June, 2018


Chris Nguyen, CEO, and Co-Founder of LogDNA is currently building his third tech company in which one of the previous ones got acquired. In this video, he shares the process of being acquired, which in their case took around 60 days.


Video Transcript:

What happens during an acquisition process?

The moment we got the offer, what really happens is what is the number? The economics have to make sense on both sides. They have to figure out a number that makes sense for them to acquire the business. As founder is this the right number for us today?

The moment we identified that this is the right dollar amount it is also about setting the right expectations. Both parties were setting expectations to decide how long will this take to close. There is a process called due diligence. That is the nitty gritty of the details.

They would talk to customers, look at how the technology is built, and the moment you sign a term-sheet, the balls are in court in terms of doing all the due diligence. To be able to come out to the decision to say ‘This is the company we want to acquire’, and that whole process, from the moment of signing term sheet to closing, took 60 days, which was considered fast as it was more of a smaller acquisition.

It was cool to go through that process because they dug deep in terms of finance wise. They want to make sure to see if we have the right technology that we presented that we have. Also from a revenue perspective, our revenue growth, and our thought process with the business.

It was pretty quick in the grand scheme of things. It was fun. We had five people on-board. It happened pretty fast. Speed happened pretty well. The founder and CEO were ready to make the move and so we got to the finish line collectively. I loved that experience. Now it just becomes a clockwork of expectations of what we thought about that moment in time when we will ever cross that bridge again.

With an acquisition, expectations are here is the founding team and how long they will be staying with the company. Funny enough they call it the golden handcuffs, and we stayed for 2 years. They didn’t want us to leave because you always want that knowledge to grow with the company, and you’ll definitely learn a lot in that process.

I got to wear many hats in the organizations. This was a company that raised private equity money to be able to acquire more companies along the road. I got to learn a lot that I would not know today. I’m glad I know that knowledge having done two companies post the first company.



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