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It was in my contract. But they knew that at the time it would become an issue I'd be a large shareholder in the company and would not want to do anything to h

It was in my contract. But they knew that at the time it would become an issue I'd be a large shareholder in the company and would not want to do anything to hurt it, because that would just be hurting myself. Ultimately those kinds of terms are meaningless. That's what I learned then. I've never heard of a counter-example.

cbsmith 13y ago
> I've never heard of a counter-example. Oh, these things can go very differently. Normally it works best if there is a change of control clause, the acquired company is MUCH smaller than the acquiree, and the acquiree is primarily owned/controlled by professional investors. Then you've got a situation where you basically have nothing to lose and everything to gain, and the reverse is true for them. Depending on how you played the acquisition process, if you are a big share holder, you can make sure you've got enough support amongst the other share holders that you're basically in control (a year ago my employer acquired a small company... a few months later, their CEO was our CEO... and not by chance). The thing is, for most entrepreneurs, they like to be in control. They hate it when they aren't. At the same time, when an acquisition comes, they tend to see it as an exit.. an end of the line. So they tend not to think too strategically about how they'll maintain control after the acquisition.
deleted 13y ago
[deleted]
mst 13y ago
I wonder whether you could create a clause that allows you to publically register your dissatisfaction with being ignored without (legal) consequence? I mean, if you're at the 'blogging your rage' stage you probably don't care if you still work there tomorrow, but nailing down that if they screw up, you're allowed to publically state that on the way out might at least make it possible for future founders to reconsider their deal options.
- wpietri 13y ago
  It's not about the legal consequences. It's about money and reputation. Suppose you quit an acquiring company and bad-mouth it in the press. First, you're probably losing money just by quitting. If they kept you around, they probably gave you some sort of incentive to stay. E.g., stock that gradually vests, or a portion of the acquisition price that was held back. Second, you probably own a good chunk of the company's stock. If your bad-mouthing is successful, that price will go down. So you've just lost money that way. Third, if you had partners or employees who also have stock, you've just cost them all money. Man, they'll love you for that. Fourth, you are now on record in the press as the kind of person who bad-mouths the company you're working for. That might mean that the next people you work for won't cross you like that. But it certainly means that people are going to be more reluctant to hire you or acquire your next company. Generally, I think the better play is to be classy about it. If you keep a strong reputation, odds are good somebody will eventually ask you on the quiet about the acquiring company or one of the executives involved. That's your chance to stick the knife in. Rather than making a little quickly-forgotten noise, you might be able to kill an important deal.
  - ScottBurson 13y ago
    > you might be able to kill an important deal That's still stupid and could backfire badly. No, the best plan is not to want anything out of the acquisition besides the cash. Sell it, walk away, do your next thing.
    - wpietri 13y ago
      The heart wants what it wants. You use plans to fulfill those. You can't plan what you want. If all you want is the cash, fine. Sometimes people want more. And often they get it.
  - yuhong 13y ago
    Of course, this is only a workaround. Probably a good example, BTW, is the AOL-TechCrunch acquisition.
- 13y ago

cbsmith 13y ago

> I've never heard of a counter-example. Oh, these things can go very differently. Normally it works best if there is a change of control clause, the acquired company is MUCH smaller than the acquiree, and the acquiree is primarily owned/controlled by professional investors. Then you've got a situation where you basically have nothing to lose and everything to gain, and the reverse is true for them. Depending on how you played the acquisition process, if you are a big share holder, you can make sure you've got enough support amongst the other share holders that you're basically in control (a year ago my employer acquired a small company... a few months later, their CEO was our CEO... and not by chance). The thing is, for most entrepreneurs, they like to be in control. They hate it when they aren't. At the same time, when an acquisition comes, they tend to see it as an exit.. an end of the line. So they tend not to think too strategically about how they'll maintain control after the acquisition.

deleted 13y ago

[deleted]

mst 13y ago

I wonder whether you could create a clause that allows you to publically register your dissatisfaction with being ignored without (legal) consequence? I mean, if you're at the 'blogging your rage' stage you probably don't care if you still work there tomorrow, but nailing down that if they screw up, you're allowed to publically state that on the way out might at least make it possible for future founders to reconsider their deal options.

wpietri 13y ago
It's not about the legal consequences. It's about money and reputation. Suppose you quit an acquiring company and bad-mouth it in the press. First, you're probably losing money just by quitting. If they kept you around, they probably gave you some sort of incentive to stay. E.g., stock that gradually vests, or a portion of the acquisition price that was held back. Second, you probably own a good chunk of the company's stock. If your bad-mouthing is successful, that price will go down. So you've just lost money that way. Third, if you had partners or employees who also have stock, you've just cost them all money. Man, they'll love you for that. Fourth, you are now on record in the press as the kind of person who bad-mouths the company you're working for. That might mean that the next people you work for won't cross you like that. But it certainly means that people are going to be more reluctant to hire you or acquire your next company. Generally, I think the better play is to be classy about it. If you keep a strong reputation, odds are good somebody will eventually ask you on the quiet about the acquiring company or one of the executives involved. That's your chance to stick the knife in. Rather than making a little quickly-forgotten noise, you might be able to kill an important deal.
- ScottBurson 13y ago
  > you might be able to kill an important deal That's still stupid and could backfire badly. No, the best plan is not to want anything out of the acquisition besides the cash. Sell it, walk away, do your next thing.
  - wpietri 13y ago
    The heart wants what it wants. You use plans to fulfill those. You can't plan what you want. If all you want is the cash, fine. Sometimes people want more. And often they get it.
- yuhong 13y ago
  Of course, this is only a workaround. Probably a good example, BTW, is the AOL-TechCrunch acquisition.
13y ago