Chapter 20Don't Forget You Still Have a Company to Run

Perhaps the first thing that you need to do before engaging with any potential buyers is make sure your lieutenants are set up for success so that the company metrics are still going up to the right while the company is exploring M&A. The best way to do this is designate one of your executives to hold down the fort while you and your cofounders attend various meetings and interact with the buyers. The amount of time it takes for meetings is not much, but you will have your hands full from doing market research and preparing for meetings. A lot of these meetings you only get one shot to make an impression, so it’s absolutely critical to prepare to the fullest so that all the demos work as expected, even the most obscure metric about your company rolls right out of your tongue, and you appear to be genuinely excited about the prospect of working together with the acquiring company.

In the meantime, set clear goals and objectives for your lieutenants so that the company still operates autonomously while you and your cofounders become unreachable. Give them the leeway to make their own decisions but check-in regularly to see how things are progressing along. Furthermore, once you tell your board you are engaging in an M&A discovery process, it’s a good time to cancel your regular board meetings and instead offer email updates on the progress as well as key company metrics. Furthermore, withdraw yourself from unnecessary recurring meetings, and stretch out the frequency of your 1-1s. Your calendar should be as light as possible in the coming months to focus on M&A completely.

As mentioned in previous chapters, it is not ideal to explain to the team on why your calendars are blocked off and you are at times unreachable. Even to your closest lieutenants, they should only be looped in when they actually need to be involved in the due diligence or interview process as the possibility of the M&A becomes more of a certainty. Looping the team too early in the process would put them through a rollercoaster ride that they do not have the full visibility and also agency over, and could lead to employee churn if things are not going well (oftentimes they will not) or expectation mismatch when the deal is finally announced. They may be expecting to be raking in millions but instead find themselves laid off and without health insurance. So instead, reset your communication expectations by proactively letting the team know that you will not be available for a lot of synchronous meetings because of some upcoming partnership discussions, but instead communications are transitioning to asynchronous messages which folks may expect slower response rate. Also work with your lieutenants to determine a roadmap for the next couple quarters, and give them the full authority to execute once you sign off on the plan. It will be tough not being able to share this with the team, but trust me, it’s tougher when you do share it with the team, the excitement and anticipation will wear off in a couple days, and you’ll be haunted with the question of what is up with the M&A at any interaction you have with folks you disclosed this with, and they will undoubtedly be disappointed and jaded when they find out that the company did not find a buyer, or what they expected to be a billion dollar exit turned out to be much much smaller.