What really happens when a company buys another one?

The real work starts.

Having been through 4 acquisitions in different forms (founder, exec, etc), it’s a lot like a venture capital investment. Usually, there isn’t actually a ton of time to really get to know each other first. Not really.

A ton of time is invested negotiating price, and then way, way too much time on inconsequential legal terms, and then … it closes. Oftentimes, very little true operational planning is done on what to do after.

It will all seem super-important to you, but from the acquirer’s perspective, they also have a core business to run, and each of the VPs already have a lot to do. They’ll only go so deep in figuring things all out before the deal closes.

So my learning is, if you get acquired — be zen about it. Don’t get your dander up. Roll with it. The acquirer often won’t really have most of the answers. VPs and execs will be thrown into roles they didn’t fully anticipate, dealing with new technologies and product lines they weren’t even managing a week ago.

The acquirer may not even really figure out what they really want to do until the second year or so after the acquisition. It takes time to learn something new.

Too much time in M&A is spent on deal terms, not enough time on post-deal planning. That’s M&A. It is what it is. Roll with it if you are acquired.

A few more learnings here: Should I Sell for $50m … Or Push On And Try to Build a Unicorn? | SaaStr

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Published on August 16, 2018

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