Turning down a couple of million dollars when you don’t have the money (and sort of needed it) was easy

I think I have already digested and made peace with the decision we made a few months ago. You read right – we said no to a couple of million dollars.

What an idiot, you say? You might be right but frankly, I have no way of knowing that now. Perhaps ask me again in the next 5 years and I will tell you whether if we’ve made the right choice or if I was being an idiot, filled with regrets of wishing I’d taken the money.

I always intended for this space to be where I document the learnings I gather from my journey of building a company alongside my awesome team at Pod. I want to talk about all the wonderful bits, confusing turns and bad decisions of this rollercoaster ride. Perhaps it can be useful for those of you out there building your own startup but more importantly, it is for me to reflect and see how much I’ve grown as a person. Regardless of how this venture turns out, I can proudly say I’ve learnt so much and these experiences and memories will always be cherished.

We had an acquihire offer (our second one since inception) knocking on our door a couple of months back. An acquihire basically means a company is buying another company primarily for the people. Once the acquisition happens, the two firm will merge and the founders along with the people in the acquired firm will likely have to stay with this new venture. In this case, it is very important that the acquired company can get on board and align itself with the mission of the acquirer.

Long story short, we were offered a few million dollars – that I can’t disclose the actual amount due to NDA, for the company and funding to run the company alongside prominent co-founders. One of them were the alumna of a prominent business school and former executive of one of the largest tech company in Indonesia. I mean if that’s not the blue-blood founder that investors love, I don’t know what is. It was like our prayers for a superstar co-founder were answered. One point for the “take the offer”column. Yingteng and I will still be front running the company and making the main decisions regarding the day-to-day and overall strategy going forward – another plus point for the “take the offer” column. But we will own significantly less of the new company compared to the ownership we have now – arguably, we still lose more and more of the company as we raise money. This makes it tricky as we might eventually lose control at a much faster rate with the acquisition. However, since we will be paired with stellar individuals as co-founders and did I mention we will be backed by a big conglomerate which makes the new firm’s valuation multiple folds of our current one? So another plus point here. To be quite frank, the fundraising climate have not been great as well. Which means we need all the chips we can get to increase our chance of survival.

My co-founder, Yingteng and I have agreed since day 1 that we will try to be as objective as possible when we build Pod and that our north star have always pointed towards how can we help gig workers in Southeast Asia have better financial lives. And if there’s a vehicle that can get us to that goal faster; grow to benefit more people in the most efficient manner possible, we will always consider it. Even if it means we will no longer be the ones spearheading it – which seems very likely in the event of an acquisition. It is easier to say that in theory but when you are presented with that opportunity, it’s like giving up your child to be raised by the Zuckerbergs (wanted to say the Gates but…. sad story for another day). I mean, you know your kid will be able to live a much better life but it’s likely that the kid will not be attached to you. I mean, think about it, they will be travelling on a private rocket to Mars or something during school holidays while you can only provide a blow up pool in your backyard, courtesy of your friendly neighbour.

So far it sounds like we will not have any objective reasons to turn the offer down. But as we deep dived into the formal offer, we realised the aim of the product was not exactly the way we imagined it to be. Our aim is to use alternative data to not only provide credits to help gig workers weather through emergency expenses but to also build credit trails that allow them to be within the financial ecosystem to access other forms of financing such as mortgages, car loans or even business financing should they plan to setup their own business in the future. However, the primary product direction of this new firm will be significantly different. Due to the non-disclosure we signed, I can’t talk about it specifically. But it is different enough to put a big mark in the “don’t take the offer” column.

I was genuinely torn. The direction of the company is not something I can agree with but the other things will give us great mileage moving forward weighed heavy on my mind. It was not an easy choice but a call to my existing investor and advisor, Ty (not his/her actual name) was sobering and gave me the clarity I needed:

Me: So this is the offer, here are the reason why this make sense: x,xx,xxx and here are the reasons why it doesn’t: x,xx.

Ty: I thought you wanted to help the underserved build credit trails? Do you really want to spend the next 5-7 years be building xyz (again, NDA, can’t talk about the actual product) instead?

Me: No.

Ty: Then, why are we having this conversation? It’s pretty decided no?

Me: Yeap, thanks.

Ty: Anytime. Goodluck!

The above is one the reasons why it’s so important for entrepreneurs to get investors they can bounce off ideas with and be the sounding board when you’re in need.

So we bit our lips, wrote a polite email and turned down the offer.

Also, the title was a total clickbait. I nearly vomited as I sent the “thank you but no thank you email”. Just like this:

Love,

Nadia

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