I’ve founded, co-founded, or been early at 12 startups in my career. Of those, eight were exits (six via acquisition), two stagnated, one was a dumpster fire, and one is still in play.
In each of the acquisitions, I made mistakes before, during, and after. I learned lessons that I carried into the next startup, and because of those lessons, each subsequent acquisition was bigger and more successful than the last.
So I’m not only hoping to hit the motherlode with my current startup, but I also know what to do when an acquisition happens. If it happens. No matter how it happens.
I’ll walk through five of those acquisitions, and pick one thing I should have done differently, either before, during, and after.
№ 1. Financial Dynamics > Spectrum > CIBER
My first job out of college was not with a startup, but rather at a large technology consulting firm. I was the sole developer on a new project, for which I was receiving zero credit. That credit went to my boss, his boss, and her boss.
So I didn’t get into startup to get into startup. I got into startup to get the hell out of a job I hated. I landed at a tiny software consulting startup in Raleigh called Financial Dynamics. The environment there was the exact opposite from the giant firm I had just left.
Financial Dynamics grew like mad, thanks to a key pivot. We created frameworks to handle 80% of our software development so we only had to do 20% of the custom work. We soon walked away from custom work completely and focused solely on licensing the frameworks.
Thus, we turned a service company into a product company.
In three years, we grew to 400+ people in six offices. We were snapped up by Spectrum, a large consulting firm, who within two years would be snapped up by CIBER, a massive consulting firm.
Lesson Learned: Have a stake before
How did I make out? Dude. I didn’t even know what a startup was, let alone what options were. So I had next to no stake in the company when we were sold.
Just because you’re at a startup doesn’t mean you’re going to get rich at the exit. I got a nice check and a new boss when we were…