Nick Kokonas on Selling Tock: How to Run a 3-Day M&A Sprint

Key Takeaways

• Nick Kokonas decided to sell Tock to Squarespace when pandemic growth peaked, knowing the company could not repeat a 200% annual growth rate the following year.
• External investment bankers typically charge a 4% advisory fee and estimate four to six weeks to organize diligence materials.
• Kokonas convinced his board to skip the external bank and pay his internal executive team a 2% success fee instead, risking zero payout if the transaction failed to close.
• The executive team answered an 896-question diligence list in 72 hours by pulling directly from internal dashboards instead of waiting on outside firms.
• Kokonas ran this transaction using The 3-Day Founder-Led M&A Diligence Sprint.

The 3-Day Founder-Led M&A Diligence Sprint

• Step 1: Eliminate the Intermediary Fee Drain: Bypass external investment bankers by offering to manage the sale internally at half their fee (e.g., 2% instead of 4%), tying compensation strictly to closing.
• Step 2: Centralize and Color-Code the Diligence List: Convert massive multi-tab banker spreadsheets into live collaborative documents (Google Docs/Sheets) and color-code all questions by category and priority.
• Step 3: Direct Assignment and Lock-In: Assign questions strictly to the operators who built the systems and lock the executive team in a room until all hundreds of items are completed in 48-72 hours.
• Step 4: Cut Through Advisory Bureaucracy: Refuse to allow deal lawyers to defer questions with 'I will take that to my client' when the buyer decision-makers are already present in the room.

When This Works (and When It Doesn't)

This framework works when selling an operationally tight company with strong internal dashboards under a hard deadline. Tock possessed clean metrics and real-time operational data before talks began. Because Kokonas and his team built those systems themselves, they could answer deep operational inquiries without hiring forensic accountants to interpret their own books.

It fails when your operational data is messy or when you need broad market discovery. If your startup lacks clear accounting or clean customer cohorts, outside advisers will take weeks simply to clean your messy books. If you do not already have an eager buyer at the table, you still need bankers to drum up competitive tension across multiple bidding parties.

What to Do With This

Audit your data room this week as if an acquirer gave you a 72-hour deadline. Open a fresh spreadsheet and build three tabs: active customer contracts, unit economics by cohort, and code repository access permissions. Assign each tab to the single engineer or operator who manages that system daily. If pulling any single cohort metric takes longer than 15 minutes, fix that internal dashboard before you enter acquisition talks.