Startup CEO, 2nd Edition

Chapter 51Preparing Your Company for an Exit

While you clearly need to spend some time preparing yourself mentally for the sale of your company, you need to spend even more time preparing your company. There are really two areas to dive into on this topic: how you handle knowledge and communications around the topic internally, and how you actually prepare for a transaction.

Private Discussions versus Public Discussions

The first decision you'll need to make around sharing the news of a pending sale of the company internally is how broadly you want to share the news. There are two primary factors that can influence your decision:

• How many people need to know in order to successfully complete the transaction?
• What is your organization's culture? How transparent are you about big and potentially scary things?

In terms of the first question, there's no set answer. It depends how large your company is and who the buyer is. Sometimes deals can be done in a weekend with founders only; others can take up to six months and require extensive participation on the part of dozens of team members at multiple levels in the organization.

Regardless of culture and norms, you do need to consider this: How disruptive is the news of a pending sale likely to be to employees? To customers? Even if you have a culture of fairly extreme transparency, the sale of the company is one thing that I think most people would expect to be kept fairly confidential. But a culture of transparency and trust ...