June 25th, 2021 | By: Wil Schroter
The moment we sell our startup — the party is over.
Sure, we'll throw an actual party to thank everyone for taking the ride with us. We're going to issue well-crafted statements internally and externally about how this new partner is what we've been waiting all long for, regardless of whether it actually was.
But once those momentary celebrations subside, we're going to look around at what's left like a frat house after an all-night rager and think "Well damn, now what?" We worked so hard to get to this point, we often have no idea what would happen to the startup once it reached that penultimate moment. But, we're about to find out.
By the time we've signed the deal and watched that big wire land in our account, we've been so focused on getting this deal done that we almost forget who we're going to be waking up next to the next day — a relative stranger. Unlike all the relationships we've built through the long history of this company, we're instantly replacing them with people we've never met before.
To make matters worse, the rest of our team definitely doesn't know who these people are. They are meeting their new "Point of Contact" (aka the person that will be replacing them in 6 months) at nearly every level. Imagine how your Head of HR feels meeting the larger companies' Head of HR and realizing they don't need two Heads of HR, or when the dev team realizes the codebase they've used isn't really preferred by the new dev team.
All of the roles and expectations the whole team had 5 seconds ago just got blown up. We're all waking up next to a stranger, and as the phrase implies, we generally don't feel good about it.
Now let's combine the job uncertainty of having duplicate roles with the removal of any meaningful reward for sticking around. It's the perfect storm of exodus, and if you watch any newly acquired company within its first year of being acquired, you can watch exactly this go down.
For years we've been selling the dream of how we would one day become so valuable that someone would want to buy us — and they did! Yay us! But no one ever said, "Hey, if that happens, what do we all do after that?" Well, now it's the "after that" part and in most cases, there still isn't an answer.
The acquiring company (if they care) will put in some incentives to keep us around, but those incentives usually have fairly short time periods, which means no one is really saying "We want you around for a really long time." Once we chop off the reward, the retention sinks like an anchor.
In short order we'll be sitting around at happy hour talking about how much we miss the good old days, when the culture was better, we were more energized, and we had a clear direction. Never mind the fact that during those years we fought incessantly, constantly complained about being overworked, and had no idea whether we'd ever get a payout. We'll complain all the same!
But regardless of our revisionist history, our view of the present is quite clear — we're simply all working at someone else's company, and whatever sense of ownership we had, both implied and literal, has been sold off. Our lunchtime conversations will transition from "what happened?" to "where are you headed next?"
What's crazy about all of this is that it's not some sad fate — it's what we actually worked so hard to get to. It's the same feeling parents get when the kids that gave them so many headaches finally leave the house — it sounded like relief, but what we really feel is what's missing.
There's nothing wrong with selling, but as Founders, we have a responsibility to know what's on the other side of the sale, not just for ourselves, but for everyone around us. Our celebrations should be mixed with preparations, for a new world and a very different opportunity for all.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.