Why Founders Leave After Acquisitions
SaaStr
APRIL 27, 2024
Why do founders leave after their companies are acquired? There are many nuanced answers, but in the short and medium term, it’s incentives. Acquirers use 3 incentives to get founders to stay: Sticks. If you leave, you lose X% of the consideration. Acquirers try to put 30%-40% of the founders’ consideration at risk, if they can get away with it. This sort of works, but it leads to “rest-and-vest” behavior if not thoughtfully combined with Carrots (next point).
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