Selling company to another entails entrepreneur’s hardest, best move

Selling company to another entails entrepreneur's hardest, best move

As entrepreneurs, many of us dream of one day trading all of our hard work for a big fat paycheck from an acquiring company.

It's the stuff headlines are made of or the cover of a magazine showcasing me as a newly minted millionaire beaming with delight at my newfound wealth.

Selling your company sounds like holding the winning lottery ticket to heaven, but dealing with your company after you've sold it can feel more like a trip through hell. 

Most entrepreneurs don't really understand what being acquired means. They understand the big payout and the rewards, but they don't understand the true cost of acquisition which only occurs after the deal is done.

It's like Selling your Kid

The truth is that selling your company is a lot like selling your kid. This is something you've created, nurtured since inception and watched grow up into something beautiful. Now someone else has come along and taken that little baby from you, and they're not giving it back.

The hardest thing about selling your company is realizing that it's not yours. The big decisions are ultimately made by someone else. The inspirational story of what you could someday become or grow into has been sold. Now you just need to sit back and let it go.

The longer you hold onto the notion that nothing has changed, the longer you're going to be putting yourself through a living hell. Things have changed, and they are never changing back. The faster you deal with that fact the easier the rest of the journey will become.

Nobody loves me

Don't kid yourself into thinking the buying company really wants you to stay, either. Of course they said they wanted you to stay, and how important you were to the transaction, even making your participation a requirement for the deal to move forward. But truth is, they don't really want you around.

They're not questioning your smarts, capability or usefulness. It's that the acquiring company wants your company to fit into the fold. So sure, they may tell you that they want you to remain independent, but the fact of the matter is it eventually wants you to report into the same structure that everyone else does. It's easier that way. 

You may be able to merge systems, finances and marketing collateral in this new deal, but what you won't easily merge is culture. No matter what the company size, the blending of two cultures is inherently awkward.

Almost immediately you'll begin dealing with an us-versus-them mentality, the way fifth graders talk about the teachers watching over them at recess. While you struggle to retain the original culture that made your company once-great, the inevitable attrition of independent values and thinking will run its course.

Eventually, their culture will become your culture. The beer-flowing Friday afternoons will turn into scheduled fun days that start at a pre-determined time and are canceled by administrative assistants using Outlook reminders and carbon copied template messages from your new CEO. When you sell the company, you sell the culture with it.

Freakin' out

The us-versus-them mentality isn't just about your culture going away. It's also about the personal security of the people in your new company going along with it. When people no longer know who controls the fate of their careers, they freak out.

All of a sudden the frequent visits to your office announcing new sales and product victories are replaced by counseling sessions about how the recent changes are making people's lives uncertain and miserable. The collective drive that pushed you to greatness is replaced by a mentality of uncertainty and a whole bunch of updated resumes on-line.

You can't keep people from freaking out. No matter how good the deal sounds people are going to map the new situation back to how it affects their lives personally. You can't create a sea of change without sinking a few ships in the process.

The best way to manage this new change is to deal with it as a major change, not an incremental adjustment. You and your team need to make a real decision post acquisition by either moving into the new house and living with its rules, or moving on somewhere else.

Getting acquired isn't a bad thing. It's only a challenge if you create an unrealistic view of the outcome you've created. If you're willing to accept the terms and conditions of your new fate as a warm and welcoming change of pace, you're golden.

But if you think for a moment that promises made during negotiations to remain fully independent and unchanged will hold up long term, you're simply mad.

Wil Schroter is a serial entrepreneur, author and CEO of Go Big Network. in Columbus, Ohio.


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