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Nasir and Matt welcome business guru Roy Daya.  They talk about why a business might fail after an acquisition and answer the question, "I have put in many years to get my business profitable and just reached that goal this past year. We have a sound business model in place and secured investments so we have enough cash. What sort of challenges should I expect to face in scaling my business from here?" Transcript:   NASIR: Welcome to Legally Sound Smart Business. This is Nasir Pasha. MATT: And this is Matt Staub. NASIR: Welcome to our business legal podcast where we cover business in the news with a legal twist and also answer some of your business legal questions where you, the listener, can submit to ask@legallysoundsmartbusiness.com. Today, we have a fun guest today. We have a nice startup guru for some of your high-tech startups listening out there. His name is Roy Daya. I call him a startup guru because pretty much every successful startup has one of these consultants in their arsenal – one of these guys that can get them through the process that has been through these serial entrepreneurial cycles before. Roy, welcome to the program! ROY: Hi! Thank you for having me! NASIR: Absolutely. Matt, what store are we covering today? MATT: On this show, we talk a lot about startups and we talk about a lot of big public companies, too. Typically, the problems or the mistakes they make. But we don’t spend a lot of time necessarily in the middle. We’re past the point where they’re a startup and we’re getting to the point where the company might be acquiring something else or they might be on the other end and they might be acquired by a bigger company. It could be in a variety of ways – revenue, maybe a product line, maybe the actual people of another company, or maybe the intellectual property. From what I understand, Roy, you deal a lot in working with these companies on either end. I don’t know if you’ve had any experiences from your perspective in the acquisition phase for these companies. ROY: Yeah, I have experienced both with companies getting bought or acquired and with a lot of companies that wanted to get acquired and for some reason or it didn’t happen or they’re still waiting. I know a lot of startups are obsessed with getting bought out by large enterprises and, you know, I can understand them. NASIR: The thing with these acquisitions though, we’ve seen a lot of these big corporations acquire companies. I know Yahoo! acquired Tumblr a while back and that hasn’t done much. A lot of times, I’ve read statistics with these mergers and acquisitions where, a lot of times, these startups and acquisitions don’t meet their marks. I’ve read up to 60-some percent or even 83 percent in recent years where these acquisitions are just not meeting these goals. You know, I wonder, with the Googles of the world and even Facebook, they’re just acquiring like crazy. They’re just betting on some of these are going to hit the marks and some of them aren’t. ROY: I think, on one side, it is kind of a bet. Sometimes, you know, you buy something to make sure nobody else buys it. Sometimes, you buy a company to reduce future risks. For example, if you need that other company in your operations and you rely on them, you buy from them, you want to make sure that nobody else buys them and triples the prices, for example, and it’s kind of an operational cost reduction, risk reduction. There are different reasons – not always long-term. Sometimes, it’s short-term. You’ll have a problem with your stock and the risk operation and you want to show that you’re innovative and you’re moving forward. There’s a lot of different reasons and I think not always the marks that are checked to be successful or not are the reasons why it was done in the first place. I think there’s so much information we just don’t know about. It’s very exciting. NASIR: Yeah, absolutely. I think, from my personal experience, I’ve been less representing clients that have been ac...