David Berkal, CEO, Banyon Software Services, Inc.
When you’ve spent years building your business, and your employees and customers are like family, selling is one of the most significant decisions you’ll ever make. Of course you want the best price, but choosing a buyer who prioritizes founders, employees and long-term business growth is just as crucial for a successful and fulfilling acquisition. Here’s how a founder-first approach can yield you a regret-free exit and how to find the right acquisition partner to make it happen.
The Reality Of Selling A Business
At some point along the entrepreneurial journey, you may start to think about what an exit could look like for you, your employees and customers. To begin with, emotional and strategic weight comes with selling a company you’ve built from the ground up. Even if you’ll be moving on after the close date, there will always be pieces of you within that business.
You might worry about a sale’s impact on your company culture and whether the buyer will lay off loyal team members. You may fear the effects of short-term, profit-driven leadership, which could tear away the heart of the organization and your legacy and negatively impact the customers you have worked hard to satisfy over many years.
These feelings are common and incredibly understandable. Needless to say, you don’t want to be among the many founders who regret selling to the wrong buyer.
What Is A Regret-Free Exit?
To sell without regrets, you need a buyer who will prioritize your vision and team, and champion the long-term growth of the business. In other words, you need a buyer who practices a founder-first acquisition approach.
This type of buyer doesn’t come in looking to change what’s already been established and insert their own vision in its place. Instead, they seek to preserve the company’s culture and invest in its employees. They focus on working with the existing team to leverage their resources and expertise to deliver sustainable, long-term growth while prioritizing customer relationships.
By enriching the company and stakeholders, a buyer like this ensures a positive impact across the board—and no regrets for the founder.
The Wrong Kind Of Buyer: Red Flags To Watch For
Unfortunately, some buyers might say all the right things that lead you to believe they follow a founder-first approach. To make sure you’re not falling for a wolf in sheep’s clothing, here are some red flags to watch for:
• Short-Term Mindset: Listen to talk about growth at all costs, cutting the workforce and/or flipping the company in a few years.
• Rollup Strategies: If you hear this phrase tossed around, the buyer is likely looking to consolidate the industry, which often results in a business merger with others.
• Promises Without Proof: Watch for a buyer who talks about caring for employees but has a history of layoffs and drastic cost-cutting.
• Buy-And-Hold Promise: Some buyers position themselves as firms that will buy and hold for life, but with a little research and some very direct questions, you can uncover who has sold businesses and who has not.
• Founder Burnout Exit: Some buyers intentionally overburden founders in earnouts, attaching strings to your compensation and making post-sale life miserable.
• Certainty To Close: Sometimes, a buyer might make a high offer and then change the terms at the last minute. They may drag a deal out for an extra quarter or two to see how certain numbers pan out, or might still be looking for the cash to close the deal.
How To Identify The Right Buyer
When trying to find the right buyer, start with aligning your values. Does a potential buyer share your vision for the business? Do they get excited and express similar long-term objectives? Do they have experts and resources that will supplement your success and help the team continue to grow and succeed well into the future? Or do they seem to be going through the motions, eager to move on to talk about the numbers?
Additionally, remember that due diligence is a two-way street. While the buyer evaluates your business, team and financials, you should do the same. Specifically:
• Talk to other owners who’ve sold to them and ask about their experience.
• Research their track record. Have past acquisitions succeeded? Any history of layoffs or cost-cutting?
• Understand their operational approach and whether it aligns with your values.
• Check employee reviews on sites like Glassdoor to gauge internal sentiment.
Structuring The Deal For Success
Once you’ve done your own due diligence and feel comfortable with the buyer and their approach, think through how you can structure your deal for long-term success. This includes particulars like negotiating leadership transition timelines.
What will the transition look like on a practical level? Will one partner retire immediately while the other stays on for a few years, or will there be a clear transition period? Is there a second-in-command ready to step up or will a new CEO be brought in? How will key employees and teams be affected?
When structuring your deal, both parties should agree to earnout structures that feel achievable. Earnout structures can provide a great way to share upside and risk. But if you’re not on guard, they can set you up for misery if they’re unfairly constructed.
Setting Your Business Up For Future Success
Founders want to know the business they’ve built will thrive after they sell—whether they stay involved or move on to something new. Choosing the right buyer makes that possible. Employees stay engaged, customers continue to receive great service, and the company moves forward with integrity and momentum.
Selling your business is a defining moment. Prioritize a buyer who respects your vision, values your legacy, and is committed to long-term success—not just short-term gains. With the right partner, your work lives on and you walk away with no regrets.
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