I'd say it's not fu money. We're talking total deal size of < 40mm split 3 ways (much of that isn't up front, but earned out over time).
I do think I'd regret not following through, you're right. The question is whether that regret is worse than multiple years of hating work. I guess I'm probably the only one who can answer that.
I just took a week off and went out of town. Although everyone did manage to leave me alone while I was gone, people tried to do my job because they didn't want to keep customers waiting. That resulted in a lot of problems when I got back (they had no idea how to do my job).
I'm still paying for it now. Maybe I do just have to force another > 1 week break and deal with the consequences later.
Thank you for taking the time to share your thoughts. It is helpful.
That's $13 million each. If that doesn't count as FU money I don't know what does. Even what you'll get upfront might already be in the FU money bracket. Calculating that threshold actually is quite easy (as per Mr. Money Mustache): If you have more than 12 times your annual expenses in assets you never have to work again.
> That resulted in a lot of problems when I got back (they had no idea how to do my job).
There's your problem right there. You need to start training someone to do your job so that you can go away without having things fall apart. You need to do this regardless of whether or not you want to walk away because you could get hit by a bus tomorrow. Your main goal as a founder should always be to insure that the company can get along without any one particular person, including you. If you don't know how to make that happen, hire someone who does.
P.S. I've been a principal in half a dozen startups, so I've seen it all. If you want to talk you will find a link to my contact info in my profile.
Money stops to matter when the stress gets too high and you still have to close and all that takes plus stay years on the earn out. I think the thing you have to realize is that you are the company. The past is past, so can you train (and hire) people to do the things that you are currently essential for? If you can't, do you know for a fact that the acquirer will let you hire and train those people? If not, you need to find a way to cash out less in exchange for a maximum of 6 months of training people how to do what you do now. It could be that 6 months isn't enough time. If the company has no value without, then the company has no value, only you do. (exaggerating a little for effect)
I went through a smaller acquisition which had milestone based earn-outs. Are your earn-outs time-based or milestone-based?
Mine were milestone based and I negotiated for 25% to be time-based. The company underwent a big re-org and the new leadership had their own projects which were prioritized so the milestones were never realized.
Just some food for thought while you're nearing LOI stage.
If you're being acquired, then somebody wants to see your work live on. But you seem to be a fairly large bus factor. If someone is spending 40mm to acquire you and your team and your product, is it possible that one of the priorities becomes hiring someone or a small team that can bring some more domain knowledge in? You're obviously critical to this operation, but no one wants a team where one person being out for a week means customers are sitting around waiting for you to get back.
If you can find a way to live on a salary of $300k per year, then ~$10M is definitely FU money. You can invest that money and safely withdraw 3% for the rest of your life.
Maybe try a staycation next time. Hang out in the office, let people do your job, watch over their shoulders and instruct them, but leave your own PC turned off for the duration. (And definitely don't do 8+ hour days).
In fact, maybe make that into a company policy where you do that one week per quarter such that the company doesn't fold if you get hit by a bus. Employees may actually like the idea.
I do think I'd regret not following through, you're right. The question is whether that regret is worse than multiple years of hating work. I guess I'm probably the only one who can answer that.
I just took a week off and went out of town. Although everyone did manage to leave me alone while I was gone, people tried to do my job because they didn't want to keep customers waiting. That resulted in a lot of problems when I got back (they had no idea how to do my job).
I'm still paying for it now. Maybe I do just have to force another > 1 week break and deal with the consequences later.
Thank you for taking the time to share your thoughts. It is helpful.