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What is it like to be acquired by another company?: Nerves, uncertainty and stress

In May 2013, David Hodge attended Apple headquarters in Infinite Loop. He was not an employee of the company or a supplier. Nor was he visiting. Hodge was the co-founder and CEO of Embark, a startup that provided apps for different cities in the US where you could check the routes and stops of public transport. On this first visit, the executive thought he was going to show a new API of his app. It turned out that it really started a tough and uncertain negotiation with Apple. The objective: the acquisition of Embark.

An infernal process lived in the first person

A few weeks ago, David Hodge posted a thread on Twitter telling his (unexpected) experience as an Apple purchase target. It can be read in full below:

Embark throwback thread:

My visitor badge from the day we went to Apple HQ to pitch an API improvement we wanted. Turned out it was an audition for an acquisition. – David Hodge 🚀 (@DavidHodge) October 8, 2019

The Embark executive says the acquisition process is “hell.” First, because you have to do a lot of paperwork and in the meantime you have to keep the company afloat. Embark had to keep running while Hodge and the rest of his main team and lawyers went to meetings with Apple to close the deal.

Embark app interface over the city of San Francisco.

The negotiation lasted several months. In between, they had to go to the WWDC in June 2013 where Apple unveiled iOS 7. The head of Embark says he could barely attend the development sessions during that week, for having to meet and talk on the phone constantly. As a curiosity, I went to the Yerba Buena Gardens that is located just in front of the Moscone Center in San Francisco where WWDC 2013 was held.

Embark had several investors, including the well-known Chris Sacca. During the process they “burned” three months of financing in the negotiation. In addition to $ 195,000 in legal minutes for an agreement “that might not come out.” According to the founder, they went from having 16 months of funds to only 8 months. Luckily, the deal came to fruition and Apple eventually acquired Embark for an unknown price.

An acquisition race to improve Apple Maps

Currently, Apple is rebuilding Maps from scratch. But during the months following the debacle of Apple’s maps and after the dismissal of Scott Forstall in the fall of 2012, the company went shopping. HopStop, Embark, WifiSlam, Locationary, BroadMap, Coherent Navigation and Mapsense were the startups that Apple acquired in the following months and years. The idea was not only to collect technology but to hire the talent necessary to turn around Apple Maps. A movement known as acquihire, which in English refers to acquisitions that are actually hiring personnel.

Embark’s case tells us a bit of this chapter in Apple’s history. One in which HopStop and Locationary also enter the scene, two other startups already mentioned. Hodge tells in his same thread how at one point, when the negotiation was on track, his phone rang because he had jumped a potentially devastating news: the acquisition of HopStop.

After several months of negotiations, there were times when it seemed that the agreement was going to be canceled

The acquisition came to fruition on August 22, 2013. Hodge states that he suffered health problems, there were episodes of panic due to lack of correct signatures and that the relationship with his partner suffered greatly. The negotiation required that it not be disclosed to any family member or friend. The rest of the details remain under a non-disclosure agreement. Hodge spent almost three years at Apple and later abandoned it to create an app for Tesla cars. At the beginning of 2019 he joined Stripe, where he continues to work.

Without a doubt, it is an amazing story. Living an acquisition by a technological giant is rare, even more to find a story about how it is to live from within. Thanks to Hodge, we now know what Apple is supposed to acquire your company: nerves, stress, blunders, uncertainty. But above all, satisfaction.

Also published on Medium.

Published inStartups

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