Start Up Employees: 9 Things To Do If The Startup Is Acquired
Based in the beautiful city of New York transformation states that sustainability is at the core of everything it goes. But is that really the case?
Things are uncertain during the acquisition process, but you should certainly prepare yourself:
1. Research the new company.
Gather information to help you decide whether you want to join the new company or leave. When SugarCRM acquired Node, I studied SugarCRM’s website and Wikipedia page. I also looked up other employees at SugarCRM on LinkedIn to see who my future colleagues would be.
2. Talk to people at the new company and your current company.
Talk to people at the new company to learn more about the new company culture. This also allows you to make a good first impression and establish relationships before you start needing help after you join. Continue conversations about the acquisition with your current colleagues. They might have information about the acquisition or compensation negotiation process that you don’t know.
3. Reread your initial offer letter.
Find your initial offer letter and read the details about your equity. I recommend reading Venture Deals by Brad Feld and Jason Mendelson to understand the impact of an acquisition on your equity.
3. Use the remainder of your FSA, HRA, and any other benefits.
Your old startup should communicate an end date for your benefits. If they don’t, then ask. Remember to use your FSA and HRA early because you need file claims that need to be approved before you get reimbursed. Check your current benefits to see if there’s anything else you’re forgetting. Start looking at the new company’s benefits too.
4. Ask about your new reporting chain.
Your relationship with your manager and your managers relationship with theirs will directly impact your work life, so ask how the acquisition will impact your reporting chain.
5. Ask about the new product roadmap.
The scope of your work will likely be different than what you originally signed up for when you joined the startup. When SugarCRM acquired Node , the scope of my work changed from applied machine learning to software engineering because the goal was to integrate Node into SugarCRM’s platform over the next 3 months.
6. Ask who from the company is joining the new company and who isn’t.
I was surprised that Falon Fatemi, Node’s Founder/CEO and one of my role models, wouldn’t be joining SugarCRM and was planning to start a new company. A close colleague left before the acquisition. Other team members didn’t join as full-time employees, but as consultants. You won’t know who’s planning to join and who’s not unless you ask.
7. Renegotiate your salary, equity, title, and benefits.
You have the most leverage against employers before you sign an offer letter. Everything is negotiable. I learned the hard way that you should try to negotiate with both the representative from the acquiring company as well as the executive representing you in the acquisition. The power dynamics will be different in every acquisition. Sometimes the new company might be willing to pay more to keep you and other times your startup representative will fight harder for you.
8. Look for a new job.
This is a good time to look for a new job. There will be less work as management concentrates on the acquisition as opposed to the product development. Recruiters love it if you say your startup was acquired, even if it was out of your control. You can survey other opportunities and offers before deciding if you want to stay. Even if you want to join the new company, you’ll have more leverage when you negotiate compensation if you have competing offers.
9. Join the transition team.
Sometimes, there’s a specific task force created to help the startup with the transition. At Node, I felt like everyone was part of the process since we were a small team. If a transition team exists, it’s nice to join because you’ll get more opportunities to work together with the new company’s management.
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