Reply To: M&A involving startups


Mirinda Lowe

There are several sides to this to consider. Yes, often the founder(s) are a large part of the success of the original company. This is true in terms of vision, management, staff retention, as well as customer attraction many times. So, keeping the founder(s) on the management team can be very valuable, even critical to the merger success. Often, though, the founder will not be as engaged, for reasons several here have noted. The founder is used to it being there company, being in charge. Moving to being a small part of a structured organization can leave them less than engaged, and wanting to leave. They usually do leave, well before they often say they will. This is true often of much of the management level of small organizations acquired by large companies. Sometimes, the leaders staying can be a negative for the new company, if they are not fully supportive, their presence can be detrimental to ongoing success. The acquiring company needs to evaluate all these options in depth as part of their change management of the integration.

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