I was one of the founders of RestEngine, which was ‘acquired’ by Twitter in 2012. We told prospective clients that RestEngine was a “social marketing automation platform”; I still don’t know what that means. The deal was a typical talent acquisition where Twitter paid some money to dissolve the company and then offered stock options to retain certain team members. This article describes how I mismanaged the transaction.
We had spent months trying to win Twitter’s business (for outbound email services). After many calls & emails, they finally invited my co-founder and I to a meeting that I thought was going to be a sales pitch. During the pitch, they asked a bunch of weird questions and I was pretty sure we would never hear from them again. Later that evening, I got a call asking if we would consider selling our company to Twitter.
Since RestEngine wasn’t doing well (our platform sucked and most of our clients were going out of business), an acquisition was attractive. We told Twitter that we wanted to take the next step and had a meeting with a VP and a corp dev person. During this meeting, the Twitter folks quickly realized that I didn’t posses any talent worth acquiring. But, they did want to acquire/hire my co-founder.
Unfortunately, my co-founder and I didn’t have a great relationship. We met in 2009 at a dinner with a mutual friend. A few weeks later we decided to start a company. For various reasons, he couldn’t quit his job until we could pay him a full salary. I was way too eager to ‘do a start-up’ and agreed to work full-time with no compensation. This arrangement took its toll on our relationship.
Back to the Twitter negotiations. Since they only wanted my co-founder, all future communications went through him. And, I traveled to London for a friend’s wedding the same day that we got a term sheet.
Due our strained relationship and my absence from the negotiation table, a number of shenanigans occurred between term sheet and deal closure. Unfortunately, I am not able to go into details as that would probably violate the NDA and make me sound like a cry-baby.
Looking at the bright side, I am still amazed that my co-founder and I finalized the deal without wasting the proceeds on a legal war of attrition. While we may have been able to get better terms, the outcome was about as good as could have been expected. And, most importantly, now I get to be the douche-bag who can say that he ‘sold’ his previous company to Twitter.