Recently I wrote about how I think about private company acquisition strategies using FullContact as the example of one where it is working well.
Last week I was at a board meeting for a different company which did an acquisition a month ago. I heard a fantastic line from the founder of the company that had been acquired.
It’s business as usual except better.
Now, it’s only a month in. But this is what an investor loves to hear after a month.
Usually, the first three months post acquisition are up and down. The acquirer and the acquiree are trying to figure out how to interact. The founders of the acquiree are usually tired from the deal process and adjusting to their new reality. The acquirer is trying to be helpful, which is often precisely not helpful, especially as the acquirer integrates the acquiree’s people into its structure and processes.
I know a lot of companies that have a very well defined post-acquisition process. However, many of them don’t take into consideration the dynamics and personalities of the acquiree. Instead, they assume that everyone will happily be assimilated.
Other companies have a very hands off approach for a period of time, sometimes up to a year. But, after that period of time, the mechanical integration often begins. In situations where there has been little to no interaction, followed by too much interaction, pain often follows.
There’s something in between. This is especially important when younger private companies (50 to 500 employees) acquire another smaller (1 – 25 employees) private company. There is no one way. But your goal should be simple: “It’s business as usual except better.”
Also published on Medium.