| LifeStyleAgent liked this article from John | | | | DocVerse was founded in 2007 by Shan Sinha |
| Warrillow. | | | | and Alex DeNeui, two Microsoft veterans. They |
| Recently Google acquired DocVerse for $25 | | | | didn't hold out for decades trying to build a |
| million. DocVerse allows a group of users to share | | | | billion-dollar enterprise. Instead, they deemed $25 |
| and edit Microsoft Office (Word, PowerPoint and | | | | million a nice return on three years' work and |
| Excel) documents in real time without having to | | | | cashed the check. |
| e-mail them back and forth. Google plans to | | | | The third question was undoubtedly asked of |
| integrate the DocVerse technology into its Google | | | | Sinha and DeNeui directly, and it will be asked of |
| Docs application, accelerating its adoption. | | | | you when you are ready to sell your company: |
| But why did Google buy DocVerse instead of just | | | | No. 3: Why do you want to sell your business? |
| creating its own technology to imitate what | | | | This is a trick question of sorts. Most sellers (if |
| DocVerse had built? | | | | they answer this question truthfully) will say |
| The answer lies in the three questions large | | | | something like: |
| companies ask before they make the decision | | | | "I'm tired and burnt out." |
| whether to build or buy. The first two questions | | | | "I want to do something else." |
| they ask themselves; they ask the seller the third | | | | "I'm worried about the future of our company." |
| question. Preparing a bulletproof answer might be | | | | "I'm worried about the future of our industry." |
| the key to sealing the deal. | | | | "I think we've grown as quickly as we can, and |
| No. 1: Can we build what they have created? | | | | we're starting to reach a point of market |
| Maybe your company has a unique piece of | | | | saturation." |
| technology or a patented product that can't be | | | | Had DeNeui or Sinha answered with any of the |
| copied. Good for you. Most businesses don't enjoy | | | | responses above, I believe Google would have |
| such deep and wide protection, so a competitor | | | | built its own version of DocVerse, despite the |
| willing to invest the time and money to replicate | | | | time and cost. Nobody wants to buy a business |
| your business can provide you with stiff | | | | the founders no longer believe in. My |
| competition. | | | | guess–and I'm only guessing–is that the |
| Google has access to some of the smartest | | | | founders had a much better response to that |
| engineering talent on the planet and more money | | | | question. You should, too, if you want to sell your |
| than most countries, so it's safe to assume it | | | | company to a bigger fish. |
| could have built what DocVerse created. So why | | | | An acquirer wants to hear that you are excited |
| didn't Google just build its own DocVerse? | | | | about the potential of your business and are keen |
| It comes down to the company's answer to the | | | | to stay on and help capitalize on the opportunities |
| second question: | | | | the acquisition creates. A better answer would be |
| No. 2: How long would it take and how much | | | | something like: |
| money would it cost to build what they have | | | | "I'm at a stage where I'd like to create some |
| created? | | | | liquidity for the value I've created so far and at |
| Assuming an acquirer wants what you have and | | | | the same time participate in some of the growth |
| the company can buy your business for less | | | | and potential a merger would offer." |
| money than it would cost to build what you have | | | | This is merger-and-acquisition code for "I want to |
| created, then you are an attractive acquisition | | | | get paid upfront, but I'm willing to stay on for a |
| target. | | | | transition period of sorts to help drive the |
| In the case of DocVerse, for $25 million Google | | | | integration." |
| instantly got access to a piece of technology it | | | | Since the third question will be asked of you |
| wanted. Could Google have built it from scratch? | | | | face-to-face, expect a potential acquirer to be |
| Sure. Would it have taken more time and cost | | | | looking into the whites of your eyes for any sign |
| more money than simply buying DocVerse? Yes | | | | of weakness. A crisp response could make all the |
| again. Therefore, the company got acquired. | | | | difference. |