15 April 2019 | 22 Comments
A few years ago, a company explored the possibility of acquiring Stonemaier Games. They approached me about it, and even though it wasn’t something I had previously considered or was actively seeking, I wanted to learn from the process. So we talked a few times, and nothing came of it (except this article).
Roughly 2 years have passed, and even though we’re still not actively seeking investors, we’ve received a few different types of offers during that time. A few of the offers are partial investments–people who are interested in spending $50-$300k to acquire a few shares of Stonemaier Games (we’re not a publicly traded company, but our ownership is broken down into 1000 shares, 901 of which are owned by me).
I really appreciate the partial investment offers–those are not small sums of money, and it feels good to know that other people believe that much in Stonemaier Games. It’s also nice that those offers wouldn’t impact the way I run the company. I don’t take any of that for granted, and I’m open to hearing from other investors at this level (firstname.lastname@example.org). However, at this point in time, they also wouldn’t really add anything other than a temporary boost to cash flow. Also, it doesn’t help that having more shareholders complicates taxes quite a bit.
Then there was a bigger opportunity from an entertainment company that has floated the idea of a merger or full acquisition. This is not uncommon in the tabletop games industry, especially over the last few years.
There isn’t an offer on the table, just an exploratory process. I experiment with different options all the time at Stonemaier Games.
It was this opportunity that made me revisit my previous post on this topic. I’ll skip over the sections feature questions for the buyer and previously acquired companies, as they remain unchanged. My updates are to the following section:
Questions for Yourself
- Are you happy with the way things are? Just because a company is interested in buying Stonemaier Games–even at a fair price–doesn’t mean it’s a good fit. There’s always plenty of room for improvement, but I’m very happy with what my company is, as shown in our most recent stakeholder report.
- Is the acquiring company offering assets (beyond financial) that will make your life and your company better? This is a question I struggle with, because all of the assets I need for Stonemaier Games to function are already in place. Could they be marginally better? Perhaps.
- Will the deal let me do more of what brings me joy with no regrets? It’s certainly a good opportunity to take a step back and consider if I enjoy running a company or if I’d rather just do one specific thing and let a team of other people handle everything else. For me, I really enjoy the variety of my daily schedule.
- How much of a say do you have in the decision? I own 90% of Stonemaier Games, so while I include the other owners in important decisions, the final decision is mine to make. You might be in a very different position based on your ownership level. Another way to look at this is “Do I owe it to my investors to take this deal?”
- Do you mind answering to someone else? I answer to other people all the time! :) The one thing that concerns me is having poor leadership–I’ve had bad bosses that impacted my ability to manage projects and people, and I don’t want that to happen again. However, if their leadership has similar philosophies and principles as I do, this may not be an issue.
- How secure do you feel about your future? The future is just as risky as it is exciting. If I receive an offer today, there is a certainty in it that can’t be matched by an unknown future. That alone isn’t a reason to accept an offer, but it’s certainly a factor I consider.
- How much control do you want? I really like that Stonemaier Games hasn’t ever sought accelerated growth. We publish 1-2 new games each year and a few complementary products (while reprinting and supporting older content), and I like having control over that type of growth, as I feel it’s the most respectful to our frequent customers.
- Does this deal protect the products and people I care about? This extends to my customers, part-time employees, independent contractors, partners (distributors, international publishers, manufacturers), etc. There are people whose entire business (or a significant portion of it) is tied to Stonemaier Games or one of our brands. I feel that I have a moral obligation to those people.
- How much is your company worth? This is a tough one to answer because my company is only worth what someone else is willing to pay for it. There is no standard valuation formula that applies to every company or every industry. However, this could be a reason to enter the fray of the acquisition process, as I could walk away from it with a much clearer view of how investors perceive the value of Stonemaier Games.
- What’s the minimum offer you would consider? I think it’s worth figuring out this price early on in negotiations so I don’t waste the investor’s time and they don’t waste mine. My number fluctuates, and it depends on the other factors mentioned here.
- Do you want to continue to run your company, or are you ready to focus on something else? Acquisitions typically either focus on the people, the intellectual property, or both. I think I would prefer the latter, as I would like to continue doing what I love and serve the IPs I’ve helped to establish.
- If you continue to run your company, what types of changes to your routine are you worried about? I rather like working from home, and I wouldn’t enjoy having to attend a bunch of meetings every week–I like that I only have 1 each week in my current schedule. I also really enjoy the sheer variety in my daily and weekly routine.
- How will your existing fans perceive the acquisition? I’ve had a few people tell me, “I sure hope you don’t sell out.” I’m always intrigued to hear that, and I’ve tried to dig deeper when possible to better understand what they’re saying. At the very least, it’s a good reminder to me that the way people perceive my company can change based on if we’re acquired and who acquires us.
Have you ever been approached about a partial or full acquisition? What are some additional questions you think are worth asking? And when a company is acquired in an industry you follow, how does your perception of them change?
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