4 Ways to Ensure a Smooth Transition When Acquired

Welcome to our new Founder Friday series. Our guest blogger today is Erik Severinghaus, Founder and CEO of SimpleRelevance, and an alumnus of the Techstars Chicago 2013 class. 

Owning your own company is an unpredictable experience. As strong as your vision is, you can’t foresee the ultimate outcome of the company. It’s never clear that you’re taking the right actions toward success. You can read all the books you want about starting a company but the outside factors affecting your company will take hold in unexpected ways.

As both a tech enthusiast and an entrepreneur in the year 2011, I had a clear vision of how a new form of machine learning could improve digital marketers’ reach to consumers. My experience creating cloud systems at IBM lent me a significant tech foundation to build that vision. The company I came to establish, SimpleRelevance, was well-received by tech enthusiasts and investors in Chicago.

During the next two years, we gained valuable connections in 1871, Chicago’s startup hub, then joined the Techstars accelerator in Chicago.

As is the case with most entrepreneurs starting their own companies, my ultimate goal was not to become acquired, but to change the future of digital marketing.

However, to achieve the scale and results we wanted in a crowded space, we either needed to raise a ton of money or join forces with another organization, both of which create opportunities and tradeoffs. As we got to know the good folks at Rise Interactive, it became clear that combining our platform with their organization would create that rarest of corporate events, true synergy.

As a founder and CEO of a tech startup that recently went through my first acquisition, I found four key actions to ensure a smooth transition:

  1. Know the acquiring company’s values

Our situation was unique in that I had met the CEO through Techstars and known him for years prior to agreeing on an acquisition. I was aware that his personal and company values aligned with mine. To build a company, a foundation of moral standards is essential to drive the success of a company in the right direction.

  1. Keep your employees informed

There will be a lot of initial questions about each person’s future with the company. It’s an unsettling time for most employees: change mixed with the uncertainty of whether their careers will continue with the acquiring company. The best way to put everyone at ease is to remain as transparent about the process as possible. Set up regular meetings and over communicate.

  1. Have a backup plan

I consider us to be extremely lucky that all seven people of the SimpleRelevance team were offered fitting roles within the acquiring company. I see this as a runoff of their company values being aligned with our own, but this won’t always be the case. Even if you think your views align, not every member may have a place in the acquiring company. In this instance, it’s essential to set up a game plan for so everyone understands how they will be taken care of should they not transition to the new company.

  1. Keep checking in

Even after the deal is signed and the job offers are dispersed, people will have questions. It’s not always obvious how much involvement to maintain with the original startup versus the new acquiring company so it’s important to make expectations clear by meeting regularly with the original team.

Overall, SimpleRelevance’s experience during the acquisition process was as seamless as I hoped it would be. Incorporating the technology into the acquiring company is often the easiest fit, but the most important part of the company – your team – may not always be prioritized. These four actions should be the outline of your acquisition process for a clear, easy transition.

How was your acquisition experience? Let me know in the comments!