Hot Seat

Chapter 44. Negotiations

Selling a company is a long, drawn-out process, fraught with peril. Like any complex deal, there are a thousand ways for it to fall apart. Your job as the CEO is to guide the company through the process without letting the company disintegrate while it’s happening.

Don’t Wreck the Company

Small companies have limited ability to focus. There are only so many people, and so many things that they can do at once. As you start the process of negotiations around a sale, no matter how much of a long-shot speculation it is, people will get wind of it and start to focus on it.

Then bad things start to happen. People start to relax without even realizing they’re doing it. They start to think of consequences in different terms—hey, this will be a problem a year out; the deal will probably go through by then. They start to shift their decisions—maybe we should focus our energy on the parts of our product that we know the acquirers are interested in.

You start to take your eye off the ball of day-to-day management. Your attention is split between the dull details of sales targets and product reviews and the exciting, high-stakes negotiation for your company’s future. The team can sense you’re not pushing as hard.

Then they start to worry. “Did you hear the company is for sale?” they whisper in the hall. It has a worrying sound to it. Optimists start budgeting for a windfall. Pessimists start worrying about being fired. Everyone starts looking for ...