Money has never made man happy, nor will it, there is nothing in its nature to produce happiness. The more of it one has, the more one wants.
In Section I, we reviewed the importance of having a clear vision for the future of the firm, understanding what is best for the firm and its clients. If you are a founder or a successor and this isn't yet clear to you, go back and do your homework. Seriously. Mark Tibergien lays out the pitfalls if you don't: “The error people make in this process is to mistake genuine succession for mere equity transition. As soon as the financial issues get put first, people end up looking for a deal.” Going right to the economics means neither side can close the gap. There's not enough positive emotional investment to counterweight the emotional obstacles. Whatever a successor offers appears to diminish the founder, and the successor believes that the founder is coming from a position of greed. Feelings are capable of being hurt on all sides. Our goal in this section of the book is not to get “into the weeds” on deal dynamics, financial statement reviews, or other factors that appropriately influence the ultimate transaction. Rather, our goal is to show how the intersection of the financial dimension with the organizational and emotional dimensions can produce challenges—that can be overcome.
In this chapter, we take a big-picture view, and then we drill deeper into these issues in Chapters 6 ...