Technology companies, more than almost any other type of company, rely upon employees as the engine of growth and success. They count on unique individuals with vision, creativity, expertise, talent and charisma to spot opportunities, build innovative products and adapt to fast paced markets. The traditional adage holds true. Every night the most important assets of a tech company, its people, walk out the front door and go home. Many tech companies operate as lean and mean machines, and haven’t built much resiliency into the company’s people strategy. So what happens when a really important member of the team leaves just as you get ready to sell?
The reality is that the longer you’ve been in business, the more likely you will have lost a key employee at the wrong time. Whether it’s due to retirement, conflict, differing visions, money, desire to start a new venture, or a combination of reasons, the loss of key people can be a disruptive event in a company’s evolution. Worse yet, you may think that you need to put some of your biggest plans for the company on hold while you recover. If you are considering selling when this happens, how should you respond? Should the departure affect your plans to test the market? Should you delay or abandon your plans to sell? Knowing that the current market is hot and tech companies are being snatched up by buyers seemingly every day, should you wait to recruit a replacement? Does it matter if its management, a technologist or a sales rain maker who leaves? Should you even start a search? Can you expect to find a good transaction?
Contrary to your first reaction, losing a key employee does not have to be detrimental to your future or undermine your M&A prospects. So the answer is a resounding “Yes”; push on, certainly you can sell and you should not delay starting the process either. The loss of a key member of your team should not impact whether you sell or who you sell to. What matters most to your business and to buyers is how your company responds by adjusting and moving forward. Remember that companies are ultimately run by teams, not individuals. Talented, motivated teams are flexible and will adjust.
In fact, it can actually highlight a strength of your company – showcasing its resilience and talent depth. Experienced buyers know that all businesses lose people, but the good companies eventually succeed as a team that works together, overcoming adversity and exploiting opportunities. Remember, these buyers have far deeper benches than you. They are able to contribute specific expertise, exceptional talent and additional manpower that can help you continue to grow. The process of finding a buyer is a mutual selection exercise. It’s equal parts of the buyer selecting your company to acquire and you selecting the right buyer to sell to. So if your company has an unexpected, late breaking talent void, consider the buyer’s ability to help you recover and build additional depth into your team as one of your selection criteria. Above all, push on and pursue the sale of your company.