What really happens when a company is acquired

Since February, I’ve been trying to articulate just what happened through the course of our acquisition process. It turns out that the process is still ongoing.

So what happens in an acquisition?

First off, why do acquisitions happen? This type of smaller acquisition that I’m talking about is becoming more and more common. It’s not an indicator of an economic bubble. It’s not about a tech talent arms race. Buying a company for the expertise or processes embodied in a great team has become a reliable channel for sourcing ‘talent’. It all looks sensational from the outside, but the reality is that the math just adds up: finding the right people is costly; not finding the right people is a huge risk as large incumbents are under constant pressure to keep a step ahead of the small and fast innovators at the bottom of the market. Acquiring teams is becoming standard procedure for big companies that want to maintain relevance by moving at least as fast as these ever-emerging competitive threats. In a market where driven individuals gravitate toward assembling a small scrappy team and taking a shot at something big, there is an ample supply of preassembled teams ready to be integrated into a bigger company and get to work.

So in this kind of environment, most companies — at some point in their lifecycle — end up entertaining the option of an acquisition. When that ends up being a good (or even the best) option for a team, there is a long process involved in actually making that happen. From the outside it seems to happen overnight — a few negotiations, a firm handshake, and a done deal. The logistics of how a deal gets done are much more complicated and in each case quite different. No two are alike. You can read books and blog posts about the mechanics, but it’s all pretty dry stuff. The juicy bits of an acquisition, the parts that all acquisitions have in common, have nothing to do with compensation (how much cash did they walk away with?) or vesting schedules (how long are they tied to the new job?) or intellectual property (will they keep the product running or shut it down?). Some acquisition processes are fraught with drama (clandestine midnight visits from from a cash-filled, briefcase-toting Zuck); But most involve a series of meetings, faceless lawyers, maybe some complimentary swag, and a quiet, celebratory team dinner.

What really happens in an acquisition is something akin to the story of King Solomon where he decides, in the interest of being fair, to divide a baby into equal parts to share with two quarreling women, each claiming maternity of the child. (It all turned out to be a clever ruse to discover who would put the child’s interest above their own, but I want to focus on the morbid baby-cutting part of the story.)

Everyone on the team that has had a hand in building a product feels like this thing is in some way their baby. We use that metaphor all the time when talking about our most important work. But only now do I realize how that metaphor can be almost literal. You give so much of yourself to this thing, and you start to see yourself in it. It looks like you. You become synonymous with this project among friends and colleagues. For a short period of time, you and your team are collectively raising this thing and suddenly it comes time to put it on the alter and slice it up and divide the spoils. For your company, for your product, for your team, it all makes good sense. It’s fair. It’s just. It’s even, in most cases, a bit of cosmic luck, an acrobatic aligning of stars that brought the team to this rare opportunity (although acquisitions are becoming more common, they are still a relatively rare outcome). But everyone standing around feels conflicted because they all know that once you split this thing into so many pieces it can never again be what it once was. The baby is divided and together you celebrate and then quietly mourn.

Every acquisition goes through this. Even those rare situations where the acquiring company vows to leave the product, the company, and the culture untouched — even those people know that something is going away that can never be again.

This ambitious thing we set out to do — I can’t help but feel about it the way I feel about person I love, care about, and want the best for. That’s really what an acquisition is about: You just have to make a difficult call that will change this thing forever, and then you have to let all the might-have-been’s go. It was our job to care for it, help it mature, and hope it turns out well. You feel proud (“we did something great and it’s paying off”) but self-conscious(“it wasn’t anything special”); conflicted (“is this where I envisioned this going?”) but assured (“this is great for me and my team”); clever (“I pulled off something rare and special here”) but naive (“was just along for the ride?”). So many feels! And in the end you never really know if you got it right.

What really happens in an acquisition is individual, personal, and mostly below the surface. It starts with all the excitement and speculation you would expect, but then that goes away and you are left with a rewarding but complex mix of emotions and expectations, and those carry on long after.