What to Know About Getting Acquired: 6 More Insights from Leaders Who’ve Been There

You have two choices as a founder – you either do it alone or you take investments.

In 2022, when the add-on acquisition market had reached record levels,¹ we published our first collection of post-acquisition insights directly from leaders who had gone through the process. Two years on, acquisitions continue to be a driving force, with add-on acquisitions representing 76% of U.S. buyouts as of May 2024.²

Platform company M&A is a common value creation lever and investors are coaching their portfolio companies to look at inorganic growth opportunities more proactively. If you are part of a growth-stage business, you are probably noticing an increase in direct outreach from potential acquirers.

With this in mind, we spoke with six more founders and CEOs of middle market portfolio companies, whose businesses were more recently acquired as part of a buy-and-build strategy, to get their perspectives on when and how to approach the acquisition discussion.

We are grateful for the perspectives of this year’s participants:

• Cameron Snaith & Jay Liddell – Co-Founders of Bleeker (now True Advance), acquired by True.
• Michael Grenier– Co-Founder of Time To Pet, acquired by DaySmart.
• Gareth McGowan– Co-Founder of OBMG, acquired by Salute.
• Marissa Alden– CEO & Co-Founder of Sawyer, acquired by DaySmart.
• Kevin Baker– Co-Founder of APEX Anesthesia Review, acquired by TrueLearn.

Advice from 6 founders and CEOs about being part of an add-on acquisition.

1. Recognize your company’s turning point to know when to explore a strategic acquisition

The decision to sell a business that you have built from the ground up is not made without deep consideration. Almost unanimously, the leaders we spoke to had clear “aha moments” that signaled it was time to explore acquisition. As Cameron Snaith put it, “You have two choices as a founder – you either do it alone or you take investments.”

Many founders were motivated by a desire to expand that exceeded their internal capabilities and required the expertise, resources, infrastructure, and market presence of a larger company.

We began expanding our business into multiple countries, which was new for us. We realized that we needed to be part of a larger organization if we were to grow organically. Gareth McGowan, OBMG

“Our customers expressed a need for us to move into adjacent business areas. At the point in our maturity, we realized we did not have the tools and bandwidth necessary to close those gaps ourselves.” – Jay Liddell

Others wanted to move beyond the “fire drill” mentality of a startup and benefit from a mature infrastructure that helped enable them to become more effective leaders:

“We loved our industry and the company we built, but as we grew, we were looking to offload the managerial tasks that took up most of our time to allow us to focus on our core mission and more strategic initiatives.”– Michael Grenier

For one founder, it was a desire to align with a like-minded company that could amplify their impact:

“We started thinking about the future and what made sense for the business and our employees. We realized that we could leverage what we created to become part of a larger platform and a bigger story.” – Marissa Alden

While each leader had a different catalyst, the conclusion was the same: their ambitious next chapter required a level of growth they couldn’t achieve alone. These fundamental realizations led our interviewees to start fielding acquisition discussions; now, let’s drill down into their processes and what they each learned after that “aha moment.”

2. Find your support system and lean on them wherever possible

For most founders, maneuvering an acquisition process is unknown territory that takes them far outside their comfort zone. It’s also one of the most consequential decisions they could make – for their business, employees, and themselves. The group discussed the importance of finding people in your network who understand the terrain, have traversed it before, and have your best interests at heart.

Early on, I got advice to find trusted partners to help fill the gaps in your own resume. Find the right people to be part of your team and complement your skills in this process. Marissa Alden, Sawyer

For most, this guidance came from a banker. But that might not always be the route you choose. Founders also looked to financial consultants and other members of their network to help navigate the nuances of the process.

“If you choose not to hire a banker, you at least need to invest time in a trusted advisor who has been on the buy side to guide you through the finer points of the acquisition process. Have someone in your corner who understands the art of deal-making.” – Cameron Snaith

The group agreed that it is important to build a support network early—in some cases, even before an acquisition is on the horizon. Marissa Alden noted that nurturing her network early placed her team in an advantageous position when they were finally ready to move forward. In fact, the company they ultimately chose was helmed by a CEO who LLR introduced her to long before an acquisition was on Sawyer’s radar.

Pro Tip: Gareth from OBMG – “I would strongly recommend speaking to people you know in the industry who have gone through the process. I know my business inside and out, but I leaned on others to help with the eye-opening logistics of a strategic partnership that I hadn’t experienced before.”

3. Be intentional about your cultural, operational and financial priorities before vetting partners

Aligning strategic priorities between the acquisition target and the acquirer is critical, and it’s the topic our participants were most passionate about. Kevin Baker put it best when he said, “Building a business is a lot like having a child. You want your strategic to know what they’re doing, understand your child, and have the same degree of passion that you have.”

Finding that perfect “fit” encompasses many different facets—cultural, financial, strategic and operational, to name a few—and evaluating multiple parties against these elements is a daunting task. The group talked about what they prioritized and how they helped ensure those priorities stayed front and center throughout the entirety of the process.

Here, again, building your network early—even if acquisition isn’t on the horizon—can pay off, giving you time to explore options and assess the fit from multiple angles.

Every person we interviewed was adamant that the company they chose needed to align with their core values, including customer service, workplace culture and overall integrity.

No matter what the outcome is, consider your quality of life. A higher check is great, but it’s not the end-all-be-all. Choose a company and partnership that allows you to still enjoy what you do. Michael Grenier, Time To Pet

“Integrity is often hard to discern when having these conversations. We were lucky to have an understanding of the integrity of the acquiring business’ leadership. I have heard stories from other founders who realize, months into the process, that they can’t see eye to eye on how to run or grow a business with the people they’re going to be part of. Make sure you make this part of the evaluation process as early as possible.” – Jay Liddell

“We prioritized questions about how they care for their employees and customers, as we believe in being a truly customer-centric business. If you ensure customer satisfaction, everything else comes through on the back end.” – Kevin Baker

Evaluating softer aspects of partnership (culture fit, strategic fit, etc.) takes time and patience. Actions speak louder than words, so starting these conversations early could give you enough 1:1 context to make an informed decision.

Pro Tip: Cameron from Bleeker – “As a founder, you spend a lot of time thinking about your customers and what’s most important to them. Start thinking about the potential acquirer in the same way. What does the acquirer really care about? Your great ideas? Your relationships? EBITDA? Growth? Your people? If that’s aligned to something you want to do more of, great. If it’s not, do you want to deprioritize or change what you care about?”

4. Prioritize hands-on collaboration and research to uncover deeper insights into cultural alignment where you can

After road mapping your priorities, next comes measuring contenders against these parameters. Almost unanimously, we found that formal channels only told a fraction of the story, whereas less structured, in-person conversation and collaboration was where the deeper truth emerged.

Where possible, creating opportunities to meet face-to-face, talk and even work alongside your future partners should be a part of the process.

To better understand the acquiring company’s culture, we did everything from talk to current customers to go on Reddit and Facebook groups to see how people engage with the product and perceive the experience. Kevin Baker, APEX

“Meeting in person is really where you got a sense of whether they understand you and your mission. For example, we think our customers are special. It was really important to us that whoever was the steward of our company would also understand that they’re not just numbers; they’re people who are doing special work.” – Michael Grenier

Ultimately, the leaders we spoke to said this is hands-on work with no shortcuts. Identifying the right fit for you and your employees is a process that rewards diligence, thoroughness and patience. If you’re participating in a banker-led process, align with your advisor and be upfront about your face time expectations.

Pro Tip: Cameron from Bleeker – “We began collaborating [with leadership] before the acquisition, and I can’t think of a more effective way to kick the cultural tires than to start doing work alongside each other. Every deal process is bound to have some degree of misalignment, but to see how the acquirer responds or reacts in those moments is the real proof point. It’s important to see how people show up and if it’s the way you expect them to show up as your future business partner.”

5. Don’t underestimate the time and effort involved in the logistics of a sale

The logistics of the sale are complex and nerve-racking, and for active founders and CEOs who still attend to the day-to-day needs of their business, the process can feel both abstract and overwhelming.

That can create an unexpected amount of stress. Our interviewees advised peers to enter the sale process fully prepared. Part of the process involves preparing mentally to deal with a highly stressful, but exciting period that can last months.

Running an early-stage business naturally yields uncertainty around what the future may look like. An acquisition means managing two equally uncertain scenarios, adding a layer of complexity that’s emotionally and intellectually challenging. Jay Liddell, Bleeker

The acquisition process is intensive and rightfully so; the buying company needs to understand absolutely everything about the company they are acquiring. Prepare to be fully versed in all aspects of your business so that you can provide a complete and clear-eyed view of the operations.

“Make sure you fully understand your business and are transparent. No business is perfect, and being dishonest will hurt your credibility down the line. Make sure you have a crystal-clear understanding of documentation and finances.” – Kevin Baker

Overall, founders stressed the importance of preparing ahead of time by understanding the effort involved and marshaling the energies, resources and knowledge needed to power through this challenging time.

“Before you approach the acquisition, find a way to make it time-certain during the planning phase. Because deals like this will take as much time as you give them.” – Cameron Snaith, Bleeker

Running a process requires just as much attention as operating your business day to day. This underscores the importance of putting feelers out early, having clear expectations of what you’re looking for in a partner, and being able to lean on your team and network when these many priorities and workstreams can be at odds.

Pro Tip: Michael from Time To Pet – “Give yourself plenty of time. If you have a goal of being acquired within the next 24 months, the things you do today have a huge impact on what the outcome is going to be. Prepare yourself emotionally and your business to be in a position that accomplishes your goals.”

6. Be prepared to navigate the post-acquisition integration process

The instinct when you sign the deal is to breathe a sigh of relief. But the post-close period is not the end of the process, and the founder’s energies and focus are still required to help ensure the successful integration of the acquisition into the new company. This transition can be difficult on a personal level as well as an organizational level.

Recognize that both companies were used to working in different ways before the acquisition. Integrating with different systems is challenging in terms of time spent, so it’s worth putting in the work and getting things right from the beginning. Gareth McGowan, OBMG

While the integration process is complex, the founders we spoke to stressed that this was one of the most rewarding stages, as the advantages of acquisition—some of which they hadn’t anticipated—became a reality.

“Most founders can’t turn off the want and need to keep building things. Having a partner with more infrastructure enables you to fulfill that need, and allows you to focus on doing your job vs. responding to fire drills and mission drift.” – Jay Liddell

Some interviewees highlighted the value of having a larger built-in experienced leadership team to consult and exchange ideas with.

“I very much enjoy having a sounding board with a new leadership team to ask questions and bounce ideas off. That has been an unexpected benefit for our team.” – Michael Grenier

“Because we partnered with a company with a large add-on acquisition strategy, there is what feels like a brain trust amongst the other leaders of acquired companies within the organization. It immediately gives us access to a group of individuals with the commonality of being acquired, yet we have different ideas and solutions to offer each other.” – Marissa Alden

Also, ask upfront questions such as “How will my role change – if at all?” and communicate your vision to help visualize what your day-to-day will look like post-acquisition.

“It’s hard to know how you’re going to react after an acquisition happens. In our experience, if you did a good job and picked the right partner for your team, you’ll find yourself feeling re-invigorated by the combined mission.” – Michael Grenier

Pro Tip: Kevin from APEX – “Make sure you know what you want life to look like after the transaction happens because things will change dramatically. I knew I wanted to continue to make an impact and lead, and I made that very clear to the leadership team in the initial process.”

Here’s the bottom line.

Choosing if and when to sell your business is one of the most important decisions you could make as a leader, and it’s a deeply individual and contextual one. Despite this, some universal themes emerged out of the conversations we held with six different founders operating in a variety of industries.

Set the foundation now – build your network, whether you see an acquisition on the horizon or not. Talk to people—bankers, financial consultants, private equity partners and other founders—who have been through the process. And before you take the first step, be crystal clear about not only the financial outcomes you want to achieve but the culture, values and operational priorities you want to align with.