When selling a company, talent is often the biggest chip on the table: if the team leaves, the sale is likely to fall through. So you want them to be on board, motivated and excited.
Dag-Inge Aas was cofounder and CTO of Oslo-based telehealth platform Confrere, before it was acquired by US-based video and audio platform Daily this summer. He was hands-on in the acquisition efforts, his main responsibility being internal communication. In our Startup Life newsletter, Aas gave us his top tips for keeping the team in the loop:
Tell the team you’re having chats
Be honest from the get go — tell them you’re having acquisition conversations as you begin arranging them. Discuss what acquisition means, what you as leaders don’t know and what you need the team’s support with. Be clear about the continued role of the founders — are they stepping down, moving into new roles or leaving? The motivation for Daily to buy us was the talent — the team's knowledge and skills — so there was no question that the founders would stay on.
Telling people can create uncertainty, especially if there is a lot of time between updates — it can take months to get a deal signed — or you're unable to share information because of NDAs. This can create a lack of trust in the process or with the company you’re negotiating with. Chat regularly to the team, even if it’s just to say "we don’t know yet".
But don't tell them too much
Follow the strict rules that are in place if you're negotiating with companies listed on the stock exchange. Early news of an acquisition could potentially move stock prices and be seen as illegal insider trading.
Don’t allow space for rumours
We told middle management at our weekly Friday meeting — they had time to ask questions and process the news before supporting us, the founders, in telling the wider team on Monday at our all-hands meeting.
Be prepared for people to leave
Cultural and company size changes aren't for everyone. If people aren't motivated to stay on, it's better for them to leave. Don’t incentivise them to stay. Expensive retention bonuses, and uncomfortable and unfulfilled colleagues, are bad for both companies. Put money aside to create an economic safety net for those who don’t get a job offer in the acquisition or choose to leave. You want to support them while they find their next thing — happy leavers are excellent brand ambassadors. Tell them you want them along for the journey, explain what their new benefits would be and any bonuses they may be eligible for. Explain that if it doesn’t feel like the right move for them, they are entitled to a well-compensated offboarding package as a thank you for their commitment to the company — that is what got your startup ready for an acquisition in the first place.
Create time and space for discussion
Put time in the calendar for the team to chat without management involved. Also put time in for the team to chat openly with management — you want to hear the team's key questions and unfiltered sentiment. Parabol.co is a useful tool to anonymously gather and sort information.
Let people ask stupid questions
Organise lightning talks on topics the team will need to be familiar with in the new company — you don’t want them team to feel uncomfortable or stupid in their new roles. Encourage questions they don't really want to ask out loud. Daily is a more technical company than Confrere was, so we focused on talks like "What is an API?" These talks were so successful we've continued them within Daily post-acquisition.
On the subject of... managing internal comms
📝 Have a comms plan. It will help you communicate the right messages to minimise the anxiety of employees, boost morale and retain talent. Here, McKinsey lays out what should be communicated and when.
🙋🏾♀️ Be prepared to answer questions. There’ll be a lot of them from employees around their position, wages and how the company’s culture will change.
🤝🏽Make communication personal. Instead of sending round a generic email to employees, get the CEOs of both the acquirer and acquiree to announce the deal in a real life meeting.
📣 The role of HR staff. They are the ones who will be managing communication with employees, answering questions and preparing to merge departments post-announcement.
👀Leaders must remain visible.It’s tempting for managers to close their doors to avoid dealing with bad news. But they should remember they have a responsibility to keep employees motivated and informed.
