April 17, 2015

Selling a company, keeping its culture

One of the clashes that can result from an acquisition is that of corporate cultures. For example, a hip and casual startup might be acquired by a more formal, buttoned-up buyer. The startup thrives on looser approaches and informal communication, while the larger corporation would descend into chaos if it weren't strictly managed. These differences can be exacerbated when the two companies join forces and merge goals. 

Minda Zetlin of Inc. Magazine says it's important for startups to retain their recipe for success during the integration phase, but compatibility can be sussed out during negotiations. 

"So before the deal closes, make sure you'll be able to retain the things that create that culture," she explains. "Don't just accept blanket assurances that you'll be able to remain the same–ask specific questions about what will and will not change. "Will they want you to move out of that cool space into a local office that is a cube farm?"

A merger or acquisition doesn't require either company to lose their identity. Setting some expectations about what can be retained and what needs to be relinquished will give entrepreneurs an idea of how strong a fit the deal will make. If the startup is expected to forfeit the office culture that makes it unique and successful, chances are the acquisition won't benefit either party in the long run. First, it's helpful to draft an overview of what your company values in its corporate culture. 

With the guidance of an experienced M&A advisor, startup entrepreneurs aren't alone in navigating the mergers and acquisitions process. Contact us today to learn more about the benefits of working with advisors to achieve your growth objectives and find the perfect deal.