Building up a company is a breathtakingly difficult affair, requiring tenacity, intelligence, fortitude and more than a bit of luck. Very few ventures get out of the starting gate. Of those that do, most end up becoming little more than glorified jobs for their owners.
But even if you grow and take your company into rarified territory, your hard choices don’t end. What happens if some other company wants to buy your baby? Assuming the deal points make sense and you want to move forward, you need to figure out:
- Should you stay actively involved in a subordinate role?
- Should you adopt a largely passive but still-influential posture?
- Should you take the money and just run?
There’s no simple answer. Your decision will depend sensitively on dozens of factors. Here are some things to think:
- The Buyer’s Intent and Culture. Getting gobbled up by an arch-competitor feels different than being acquired by a neutral or friendly business. You might want to stay on to collaborate with people you know and love—or to do something big that you couldn’t do when grinding away on your own. Or you may want to keep in the mix to prevent the new bosses from messing up what you’ve built.
- Possible Compensation for Staying On. It can be tempting to ditch the business and do something else entirely (travel Europe, start a bed and breakfast, etc.). But as a condition for a good-enough offer, you may need to stay on for a bit or at least advise actively.
- Consequences for Your People. You recruited amazing people to build your business. If you abandon ship, your mentees may get the short end of the stick. They could hate the new culture, lose their jobs, or lose a sense of urgency for the mission. Do you want to protect them? If so, how could you do so?
- Personal Ambitions and Next Steps. Maybe you love your industry, and you’re eager to stay involved—just in a very different role. Or perhaps the madcap entrepreneurial life no longer appeals because of health issues—you want to slow down to take care of a spouse or get treatment yourself. No business decision is made in a vacuum.
Insights about Next Steps
- Define Your New Role (If Any) Clearly. Many former owners stay either as an employee or as a consultant. An employment contract can guarantee your medical insurance; use of a company car; access to an expense account; salary and other perks. A consulting agreement can compensate you for sharing your knowledge with the new team.
- Expect Unforeseen Challenges. The Young Turks may negotiate an attractive package. But no honeymoon lasts forever. It’s mentally and emotionally hard to relinquish control. The new team will bring on new talent, clients, technology and knowledge—and even if they share your vision at the outset, divergence over time will happen.
- Get Experienced Legal Insight Before You Make Any Decisions. You made your company a success, and your presence might help it stay that way—or it may detract from longer-horizon personal or professional goals. AEGIS Professional Services can help you meet your needs. Reach out to us for practical solutions in a complex world.