[doctor_eval]

Yep.

As one who was acquired and then had all the (written) pre-acquisition promises broken, I think the really interesting question is, how do you prevent this?

The problem is that once you’re acquired, even if you have some nominal level of control, ultimately if you’re not the CEO then the CEO will do what they want and you generally can’t do anything about it, except sue for oppression; and that trick never works.

So I reckon that if I ever do this again, I’d want to fix it by structuring the contract such that the merger or acquisition is undone at their cost if the promises are broken. I guess that would show if they really believe their promises or not.

And while it wouldn’t prevent the need to go legal, it would put you on a footing that would give you something to sue for, if the acquirer breaks their promises. And the potential for that may be all that is needed to make them keep their promises in the first place.

[grepfru_it]

>how do you prevent this?

Don't sell your company.

[doctor_eval]

Yeah, well that’s easy to say now…

[grepfru_it]

No, not really. You learn this during your first round of fund raising. Once you give up controlling equity, the company is no longer yours. It’s easy to forget that it requires money to grow your company. If it’s not your money, it’s not your company…

[doctor_eval]

Well, selling a business includes the parties signing a number of written contracts and agreements which, in theory, should persist beyond completion. So it’s really not as simple as you say, and certainly not just a simple case of looking at the cap table.

[grepfru_it]

When someone is handing you gobs of money they will very likely strike out terms which limit their control. It’s like why you wouldn’t accept a car loan with an early payment penalty unless the terms were excessively good for you

You have a board of directors, you are at their mercy.. not the other way around.