We started off this series discussing the financial & valuation challenges (part 1 of 3) that can arise from undergoing an M&A transaction. The following post was operational & resource-related challenges (part 2 of 3), and now finally, and not to be overlooked, we come to emotional & personal considerations (part 3 of 3). Often underestimated, these are deeply personal concerns that can be the biggest roadblocks to a successful sale or bringing on an investor.

  • Emotional Attachment and Legacy: For many entrepreneurs, their business is a part of their identity and their life’s work. The thought of letting go and watching someone else take control of their “baby” can be emotionally draining and difficult. Having someone to guide you through the process that’s been there before can bring you peace of mind.
  • Fear of the Unknown (Post-Sale Life): Owners worry about what they will do after the sale. The business has been their purpose and a major part of their social and professional life. The prospect of a sudden change can be daunting and filled with uncertainty. Learn how different types of owner transitions can make this process gradual and leave you with skin in the game to benefit from future upside.
  • Guilt and Loyalty to Employees: Business owners often feel a strong sense of responsibility toward their employees. They worry about how the sale will affect their team and feel guilty about “selling out” on the people who helped them build the company. In a process, owners line up the various suitors and pick the one that’s wholistically best for the company AND its employees. All post-close aspects should be considered in the process.
  • Stress and Anxiety: The entire sales process is inherently stressful, with constant negotiations, deadlines, and the fear of the deal falling through at any moment. This emotional toll can be overwhelming for owners who are also trying to manage their business. Having a skilled advisor running a controlled process means the burden is largely removed from the business owner and multiple vetted suitors stand ready to do the deal should one fall through for any reason.

When going through a business sale or recapitalization, these emotions are valid. The more you understand and talk to people who have gone through similar experiences, the faster you can put these negative feelings to rest. Having an experienced advisor on your team reduces typical frictions of a deal and that creates a robust process that maximizes your chance of success during and post close.

#M&A, #BusinessAcquisition, #VentureCapital, #PrivateEquity, #ExitStrategy, #BusinessOwner #ExitGoals