How should an early stage startup approach a potential product integration with a larger established company so as not to loose control?

It is difficult to give you a clear answer without knowing more about your company and product. Are you looking to sell or just want someone to advise you on what/how to do it?

Yo are talking apples and oranges. Capital gains are related to your basis not the form of payment. If you are a cash basis taxpayer, you pay taxes when you receive cash beyond your basis. We can help you with structure.

Unless you have a decent traffic or hugely demanded items larger comps might no be interested. Access to market is what leads companies to buy one another. I rencently bought a commercial cleaning company and merged it with my residential one to create an improved service with my people but leveraging the other company's subscriptions. I would not buy based on services, but buy either access to data, people or market. So your approach can be based on that rather than pitching a retailer with zero margins. Finding companies to pitch to is harder than it sounds and it literally simply comes down to you picking up the phone as much as you can. Good luck!

Fast growing, UK B2C SaaS doesn't really give me enough information. The most critical piece of information is your revenue/growth rate or valuation. That's going to determine both who your potential acquirers are and who the best type of firm is to help you sell. M&A firms tend to be broken into four big groups, generally based around size: full service investment banks, boutique investment banks, M&A advisors, and business brokers. At the top are Full Service Investment Banks. These are firms like Goldman Sachs, Morgan Stanely, JP Morgan, etc. They work on the biggest and most complex deals, usually nothing less than $1 billion in transaction value (their 'midmarket' teams will do $500M transactions occasionally, but not often). They also tend to offer more than just advisory, including providing funding, other capital markets transactions, banking services, etc for massive corporations. When Dell was taken private by Michael Dell and Silver Lake, bankers from Barclays and Parella Weinberg advised them. JP Morgan Chase advised Dell, the company. Barclays was also one of the four banks to provide the $15 billion in loans to finance the deal along with Bank of America Merrill Lynch, Credit Suisse and RBC Capital. Parella Weinberg is an example of the next level down - a boutique investment bank. Boutique investment banks tend to focus on larger transactions as well, usually in the $300MM-$50B range. Some firms, like Parella Weinberg, Jeffries, Moelis, etc will be the boutique bank attached to a very large deal like the Dell deal. Most often though, boutique banks are running their own transactions in the $100MM - $1B range. Boutique banks also tend to focus on a few industries where they have expertise or will have teams of bankers focused on specific industries for mid-market companies. Piper Jaffray and Cowen both have Technology, Media and Telecom (TMT) focused banking teams, for example. Boutique banks won't provide financing most of the time, unless they're a merchant bank, as they're specifically focused on helping you close a deal. Below boutique banks is a group of people called M&A advisors. They'll often refer to themselves as investment bankers, but in most cases they aren't actually registered with FINRA as an investment bank. Or they will be registered, but through a different firm. M&A advisors tend to work deals in the $20-100MM range, though they will occasionally work larger deals. Typically the larger, more complex deals are run alongside a boutique bank, in some ways similar to how boutiques will run alongside a full service bank. Once you get to this level of advisor/banker, there starts to be thousands of bankers who all have different expertise. Some of the advisors used to work at boutiques or full service banks and decided to go out on their own so they have very good contacts. Others started out in a very small advisory and have worked their way up. You're going to want to make sure you really vet their contacts and understand what deals they've *closed* in the past (not just worked on). GrowthPoint Technology Partners is an example of a good bank of this size that is focused on technology deals. M&A advisors tend not to have a lot of deals happening at once, so they'll spend more time with you helping you value your business, structure the pitch deck, etc. The bottom rung of the ladder is what are called business brokers. Brokers tend to be more focused on volume than strategic buyers. They're going to help you widely advertise that your business is for sale and then will help you manage the process of dealing with buyers. Relative to the other options, they're going to feel a little bit more like a real estate agent. A technology example of this is FEInternational. They'll help you sell your website/business by advertising it widely to other individuals who would potentially be interesting in buying from you. Their average sale prices are in the $100k - $10MM range. At this level, they'll have expertise helping you close the deal, but mostly as a straightforward transaction. It's unlikely to be a stock for stock sale or have any complexities other than some sort of escrow and a bit of due diligence. One of the best ways to figure out how you should value your business, who you should be chatting with, and how to get the most value for your business would be to work with Axial (http://www.axial.net). They have a network of 20,000 investment bankers, private equity groups, and corporations. Axial has put together a very good guide that will help you better understand your options, what you should be doing next, etc as you prepare to sell: http://www.axial.net/forum/ceo_library/ I hope that helps. I'm happy to chat more in-depth if you have further questions, just connect with me here on Clarity. Good luck selling your business.

Let's start with the premise that an investor is willing to invest "subject to mobile." Unless there is a term sheet that states this, what is far more likely is that an investor was pitched and declined to invest citing that they don't have a mobile offering. The entrepreneur likely said something along the lines of "well can we come back to you when we have a mobile offering?" and said "sure." In this scenario, there is no actual commitment or even high probability of closing an investment. So you want to start by clarifying what the actual commitment is - if any - since entrepreneurs can often misinterpret investor sentiment. Although startup to startup mergers do occur, they have a high point of failure (failure to actually close the deal) because it's very difficult to value the two companies and without real resolve from both teams, it's difficult to establish which is worth what percentage of the merged entity. All of this being said, it's really about what you want. Do you want to go it alone and build a big business behind your app, or would you prefer to be part of a team? Can you recruit a better team on your own than the one they already have? If you are unsure of your desire to go it alone, and unsure of your ability to recruit a better team for your own startup, then you may wish to consider their offer, but I would caution you not to actually close the merger until after the money had been raised. Otherwise, you are at risk of assigning your work to this combined company and if it can't raise you're then stuck. The good news is that it doesn't sound as though you have investors in your company so that actually reduces the complexity of the sale. You should really focus first on whether you love these people. Do you want to work with them everyday for the next 5-7 years? Get there first, and then consider everything else I've said. I'm happy to discuss this in more detail with you in a call. Best of luck!