When a Tech Startup Almost Lost Everything in a $47M Acquisition
AI software company / 8-month engagement / 2024
The Situation That Walked Through Our Door
This AI startup had a unicorn offer on the table - $47 million from a US competitor. They'd already shaken hands, popped champagne, told their families. Then their existing counsel flagged something weird in the IP transfer clauses and basically said "good luck with this" before backing out. That's when we got the panicked Friday afternoon call.
"We thought we were weeks away from closing. Turns out we were about to sign away three years of work for pennies. These guys found issues our first lawyers missed completely."
— Sarah Chen, Co-founder & CTO
What We Actually Did
First thing - we told them to stop talking to the buyer for 72 hours. Everyone thought we were crazy, but we needed space to dig into what they'd actually built versus what the acquisition docs said they were selling.
Turns out their core algorithm was technically owned by their university research lab partnership. The buyer would've gotten a shell company with no actual tech. We spent three intense weeks restructuring their IP ownership, renegotiating university agreements, and completely redrafting the acquisition terms. The buyer wasn't thrilled about the delay, but they respected the thoroughness.
$47M → $52M
Increased valuation after IP clarification
23 issues
Critical problems identified & resolved
8 weeks
From disaster to successful close
The Outcome
Deal closed at $52M (they got an extra $5M once IP ownership was crystal clear). The founders kept their earn-out provisions intact, and they're still working with the acquiring company - which wouldn't have happened if we'd let them sign that original disaster of a contract.
Bonus: The buyer's legal team told us it was the cleanest tech acquisition they'd handled in years. That's the kind of reputation we like building.
The Healthcare App That Was One Audit Away From Shutting Down
Digital health platform / 5-month remediation / 2023-2024
How Bad It Was
A telemedicine company got a compliance audit notice from the Privacy Commissioner. They'd been storing patient data in ways that would make your skin crawl - unencrypted databases, no proper consent mechanisms, zero data retention policies. They had 90 days to get compliant or face shutdown plus massive fines.
Their tech team knew how to build a great app. They just didn't know the legal minefield they were dancing through with every user signup.
"I couldn't sleep for weeks. We had 50,000 active users and I kept thinking about having to tell them we were shutting down because we screwed up their privacy."
— Michael Okonkwo, CEO
The Fix (That Honestly Nearly Killed Us)
We embedded two of our lawyers with their dev team for three months. Not giving advice from an office - actually sitting with the engineers, reviewing every line of code that touched user data, rewriting their entire data architecture from a legal perspective.
Built them a compliance framework from scratch: new consent flows, data encryption protocols, breach notification systems, retention schedules, vendor agreements - the works. We basically became their interim privacy officers while training their team to handle it long-term.
Zero fines
Passed audit with commendation
147 changes
Security & compliance updates implemented
89 days
One day before the deadline
Where They Are Now
Not only did they pass the audit - the Privacy Commissioner actually used them as a case study for how to do compliance right. They've grown to 200,000+ users and their privacy-first approach became a major selling point for their Series B fundraising.
We still do their quarterly compliance reviews, and honestly, they've got better data practices than most hospitals now.
The Co-Founders Who Were About to Sue Each Other Into Oblivion
SaaS company / 4-month mediation & restructuring / 2024
The Mess We Walked Into
Two guys started a software company in their garage four years ago. Never bothered with proper founder agreements because they were "best friends since college." Fast forward - the company's worth about $8M and they both claim they own the core IP. They'd stopped speaking, their lawyers were preparing for litigation, and the company was basically frozen.
A mutual investor referred them to us as a last-ditch effort before everything imploded.
"I was ready to burn it all down. Four years of my life and I couldn't even prove I owned what I'd built. They somehow got us in a room without punches being thrown."
— Anonymous Founder (per settlement agreement)
Getting Everyone to Not Destroy Everything
First step was convincing them that litigation would cost each of them $300K+ and kill the company. Neither would win - they'd just both lose everything. Once that sank in, we got to work.
We did a forensic analysis of who actually created what - going through old commits, emails, Slack messages, everything. Built a detailed IP ownership map. Then structured a buyout where one founder could exit with fair compensation while the other kept the company. Created vesting schedules, non-compete agreements, and IP assignment docs that should've existed from day one.
$2.1M
Exit package for departing founder
$0
Litigation costs (avoided entirely)
16 weeks
From deadlock to signed agreement
The Aftermath
The company's still running, now with clear IP ownership and proper governance docs. The remaining founder closed a Series A six months later - investors loved that the legal foundation was finally solid. The other founder took his buyout money and started something new.
They're not friends anymore, but they're also not destroying each other in court. Sometimes that's the best outcome you can hope for.
The Enterprise Contract That Saved a Company $3.2M
B2B software vendor / single contract negotiation / 2023
The Setup
Mid-sized software company landed their dream client - a massive enterprise contract that would triple their revenue. The client sent over a 78-page Master Services Agreement with terms that were... let's call them "aggressive." Our client's initial reaction was "just sign it, we need this deal."
Good thing they called us first.
What Was Hiding in There
Unlimited liability clauses. IP assignment of anything they built during the contract term - even for other clients. Termination provisions that let the client walk away with 30 days notice but locked our client in for 3 years. Payment terms that basically meant they'd be financing the client's software for 180 days.
We flagged 43 separate clauses that would've been catastrophic. The fun part was convincing the client's legal team to actually negotiate on them.
"We thought big companies don't negotiate. Turns out they just start with ridiculous terms to see what you'll accept. Having someone who actually pushes back changes everything."
— Jennifer Walsh, VP of Sales
$3.2M
Estimated value of liability cap negotiation
43 → 7
Problem clauses negotiated down
6 weeks
From red flags to signed deal
The Win
Got the liability capped at 2x annual contract value (down from unlimited). Protected their IP rights. Changed payment terms to net-45 instead of net-180. Added mutual termination provisions. The deal still closed, but on terms that wouldn't bankrupt them if something went sideways.
Two years later, there was actually a service disruption incident. Because we'd negotiated proper liability caps, it cost them $140K instead of potentially millions. They bought us a very nice bottle of whiskey for that one.
The Startup That Built on Quicksand (And How We Fixed It)
Fintech startup / complete corporate restructuring / 2024
When DIY Legal Goes Wrong
Three founders incorporated using an online service, issued shares to themselves and early employees using templates from Google, and raised $400K from angels with handshake deals and email confirmations. A year in, they're trying to raise a real seed round and VCs are running away screaming.
Their cap table was fiction. Their incorporation docs had the wrong business purpose. Their employee agreements didn't properly assign IP. Their investor commitments weren't enforceable. It was honestly impressive how many things were broken.
"Every investor did their due diligence and basically said 'call us when you fix... all of this.' It was humiliating. We thought we were being smart by saving on legal fees."
— David Park, Co-founder
Rebuilding the Foundation
We basically unwound everything and rebuilt it properly. New articles of incorporation. Proper shareholder agreements with drag-along and tag-along rights. Retroactive IP assignments from all employees and contractors. Converted those email "commitments" into proper SAFE notes with investor signatures.
Had to track down a contractor who'd worked for them six months prior and was now in Singapore - because technically he owned part of their codebase. That was a fun conversation.
$1.2M
Seed round closed post-cleanup
100%
IP ownership properly secured
12 weeks
From corporate disaster to investor-ready
The Lesson
They closed their seed round three months after we finished the restructuring. The lead investor actually told them our legal documentation was some of the cleanest they'd seen from an early-stage company.
Cost them about $35K to fix what should've cost $8K to do right the first time. But hey, at least they've got a company that can actually scale now. We still work with them on every major decision - they learned their lesson about legal shortcuts.