....saw this post at GigaOm this morning. This kind of story is much more tragic than anyone ever realizes. It's because there are people that are working in good faith toward a happy ending. Often times these people aren't out hunting for new jobs, because they want to show their confidence, faith and loyalty. Then for it to end so suddenly, in an opposite way than ever expected, can turn lives upside down.
I was never familiar with Ringside per se, but I'm very familiar with the story of being courted by a prospective acquirer, only to end up empty handed in the end.
Long ago, in one of my prior lives, in a galaxy now far, far away, the M&A courting was so far down the path, we were days from completing the transaction. We had good terms baked into the deal, such as jobs with raises for half the team, and respectable severance agreements for the other half of the team. Unfortunately, we had two major issues down the stretch....
1. There became a even more misalignment between the management team and the investors (there was misalignment to begin with which is why we were in the position we were in in the first place). When the management team was trying negotiate toward a completed sale, investors insisted we "walk" on some of the terms at hand. (In any deal you should walk at least once, but in this case it was three times. Yes, THREE). And each time at least one of the investors talked the others of the ledge and I had to go back to the acquirer with my tail tucked. Each time that showed a very bad hand of cards. And all the while there was naturally (but not wishfully) lots of blood spilled between management and the acquirer - unfortunate for parties that would need to live together happily ever after. It also showed the acquirers that the investors themselves weren't willing to fund the company further as an alternative. That's when the acquirer smelled blood, and began to behave accordingly.
2. The investor/management team dynamics were so far gone, that investors weren't supporting a plan B fund raise effort. It was all or nothing. It's almost a self fulfilling prophecy when a startup is working on an M&A transaction, and an earnest plan B isn't in motion. Most times having a healthy fund raise going helps leverage the M&A talks and sometimes even pushes progress over the finish line - and sometimes at a better price! I remember one investor asking me at the time "what is your plan B?" And I remember shooting back with "you took my plan B away!".
I think it behooves all parties involved, that when getting into the dance with a buyer, to ALWAYS have eggs in another basket. Always. If you don't or can't, get into the crash position.