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They are an enterprise software vendor, and it just so happens that something I've built over the past few months (with the help of my 3 partners in the project, its a 4-way split) perfectly solves a difficult problem for them. Apparently they were on the verge of acquiring another company to do the same thing, but they prefer my solution (this is why they were able to move so quickly). This, however, means that there is time pressure as they will need to cut the other company loose.
This is so out-of-the-blue that we haven't even formed a company yet around the software we've written, but we have agreed an even 4-way split.
The prospective acquirer has said that they are willing to do the deal with us as individuals, although I'm concerned about the lack of Limited Liability in that scenario.
Basically, they don't pay immediately, but the faster they pay the lower the acquisition number (ie. they get a discount for paying quickly). Its something like $6M if it takes them 3 years to pay, but down to $2M if they can pay within a year (something they said was very unlikely given their current projections, which I've asked to see).
They want me to sign an LoI within a week that will give us 45 days to finalize the deal.
How typical is this deal structure? Any gotchyas I should watch out for? Should I try to negotiate on the numbers? (ie. try to go for more than $6M)
Not to be rude, but please don't respond unless you know what you are talking about, I'm perfectly capable of uninformed speculation all by myself ;-)