Selling Your Company: Worst Business Decision of Your Life?
One entrepreneur recently wrote about why selling his company was a mistake not just for him--but for his entire team.
An acquisition is always a failure-- at least that's what Jake Lodwick, creator of Vimeo, recently wrote about his decision to sell his independent company, Connected Ventures, in 2006. In fact, he called it the worst business decision of his life.
Lodwick explained that the acquisition ultimately lead to an unavoidable culture shift. When IAC acquired Connected Ventures, the creative freedom to work on projects with little structure and an exploratory mindset were traded in for "pointless meetings where older doofuses who didn’t understand the Web, challenged our intuitions, and trivialized our ambitions."
Being acquired by a big company, goes against everything that entrepreneurs stand for, wrote Lodwick:
"An entrepreneur is someone who, almost artistically, designs a living entity which embodies the values, beliefs, and ambitions of the creator. It’s impossible for a larger entity to swallow a smaller one without completely reshaping it. When this process begins, a wild visionary – the entrepreneur type – is the most toxic, indigestible actor imaginable. And this is why I roll my eyes when a new acquisition is announced: Because I don’t see it as a triumphant graduation but a sacrifice to an industry that is afraid to dream big."
Lodwick is not the first one to claim that acquisitions by big companies suck out the talent from the industry and kill creativity. It is an oft heard complaint.
Yet the fault could lie with entrepreneurs, says Inc. columnist Michael Flatt, CEO of First General Services North America.
Flatt, who himself experienced sellers regret in 2007, says that founders often do not question why they are selling their companies. Just because you have the chance to sell it, does not mean you should. Especially, if you enjoy what you do.
