Acquisition Plans Stay Private

Shaan Puri shares his experience and perspective on selling companies, emphasizing that most companies are sold rather than bought, and the process requires careful management of communication and relationships.

Key Points:

• When to Consider Selling:

  • Great offer arrives unexpectedly
  • No longer believe in the business
  • Don't want to run the business anymore
  • Prefer to exit versus hiring an operator

• Communication Strategy:

  • Only discuss with cofounders initially
  • Be cautious with transparency to team and investors
  • Team dynamics change when they know about potential sale
  • Create a communication timeline:
    • Cofounders: Inform ASAP
    • Investors: Strategic timing
    • Employees: Wait until deal is nearly closed

• Potential Buyer Categories:

  • Unicorns (high-growth companies)
  • Dying dinosaurs (incumbents needing fresh blood)
  • Adjacent companies (peers/competitors)
  • Talent farms (companies buying for talent)

• Key Roles in Acquisition:

  • Executive champion (main supporter)
  • Company router (information facilitator)
  • Deal doula (trusted advisor)

• Strategic Approach:

  • Build relationships before needing them
  • Frame your company as solution to their problem
  • Create multiple options (one choice is no choice)
  • Maintain deal momentum
  • Don't burn bridges - deals often fall through
  • Sprint hardest after getting term sheet

• Psychology Management:

  • Managing your own psychology is crucial
  • Don't get emotionally attached to one buyer
  • Remember deals commonly fall through
  • Maintain composure during negotiations

This perspective emphasizes the importance of strategic planning, relationship building, and emotional management in successfully selling a company.