Dear SaaStr: How Do You Manage a Board That Doesn’t Want to Agree to An Acquisition?
This is one of those situations where managing your board becomes as much about alignment as it is about persuasion. If the offer aligns with the values of the founders and employees but the board isn’t on the same page … you’ve got to bridge that gap.
1. Start with Transparency About The Why
Lay out the full picture for the board. Be clear about why this offer aligns with the company’s values and the employees’ interests. If it’s about preserving culture, ensuring job security, or maintaining the mission, make that case explicitly. Boards respond better when they see the logic and data behind your position.
Attempt to be objective, and explain Pros and Cons, but why the founders recommend the deal. That will start the discussion without putting anyone on the spot.
2. Frame the Risk and Reward
Boards often hesitate because they’re focused on maximizing returns. Show them the risk of not taking the offer. What happens if the market shifts? If competitors gain ground? If funding dries up? Balance that with the reward of taking the deal—whether it’s a strong exit, a great home for the team, or a strategic alignment that could benefit everyone involved.
VCs really are in either Fear or Greed mode. Push hard on the risks re: not selling. A deep dive on how to do this in our convo with Dave Kellogg here:
3. Leverage Your Champion on the Board
If you have a strong ally on the board, use them. They can help advocate for the deal and sway others. Sometimes, hearing the argument from a peer rather than the CEO really can make a difference.
4. Engage the Employees’ Perspective
Share how the employees feel about the offer. If the team is excited about the opportunity or sees it as a natural next step, that can be a powerful argument. Boards don’t want to alienate the people who make the company run.
5. Be Prepared to Compromise
If the board is dead set against the deal, explore what would make them comfortable. Is it a higher valuation? A different structure? Sometimes, you can tweak the terms to address their concerns while still achieving the outcome you want.
6. Given Them Time
It often takes VCs time to realize an exit today is the right outcome. They often won’t see it at first, especially if they are bullish on the opportunity. It make take several weeks and conversations to get them to see it.
7. Maybe — Maybe — Threaten to Walk. If You Have To.
In the end, 95% of VCs can’t run a start-up without the founders. If you have to, be direct and open that you will quit if the deal isn’t approved. This likely will lead to a lot of drama, but if you do it calmly, without accusations, and help find a champion to socialize it first — it often works.
Ultimately, if the board sees that the offer isn’t just about a financial exit but also about balancing risk, fulfilling the company’s mission and taking care of its people, you’ve got a better chance of getting them on board.
