In troubled times, you may realize that some vital decisions in your business make 24-hour work – a living hell. Well, before you think solving that hell, here is some recommendations I would like to share from past experience.
- Rethink your reasons for exit. If you have any VC or BA pushing for an exit, ask them to reconsider, and ask them to come back with a redefined reason.
- IF any capital investors wish to exit, consider making a management buy-in or employee introduction.
If decision goes to selling, consider:
- Make proof that your employees have good conditions
- Make proof that your employees have a stable job situation for at least 12 months.
- Do a reverse due dilligence, you may be astonned around the factors and insights you will get
- Ask for an acquisition plan,
- Ask for a merger plan,
- Reviewthese. Closely!
- Ask for cash, if given shared, again – ask for cash. You can always buy shares at will.
- Earn-out: of cause, but put constraints on the buyers, and make a bonus-compensation for your employees.
- Implement a business-as-usual clause for early break of acquisition within 4-6 months. If something isn’t working – BREAK THE acquisition or ensure that you get 60-80% in hand, and your employees get 12 months’ salary – flat.
Also consider if a merge is better than an acquisition. There is a lot of feelings involved, but mostly these are associated with dumb brands, logos and stamps on invoice paper. Make a third brand and merge both companies into this, to solve any disruption around moving-forward brands.
Last, but not least, ask yourself again: Do I need to sell? Or maybe ask your employees if there are ready to involve in the lead and make up for any reasons for selling. If it’s a generational shift, employees are likely to buy.