Telling my employees was one of the toughest parts of selling my last company.
Tiptoeing around the office before I made the announcement left me feeling like a cheating spouse. When the day finally arrived, I gathered everyone together around a PowerPoint presentation to deliver the news. I'd spoken to much larger groups, but I'd never been so nervous as when I told my staff I had just sold their company. I was tense and sounded rehearsed when I explained the strategic advantages of the deal.
I fumbled with slides and spent more time looking at the screen than at the employees who had helped me build the business for the previous 10 years. I came off sounding cold, rushed and disingenuous. Of all the things I'd like to do over in business (there are lots!), that meeting has to be at the top of the list.
In contrast to my clumsy performance, Michael Arrington's announcement to his stakeholders about why he sold TechCrunch to AOL is refreshingly candid:
'(AOL CEO) Tim (Armstrong) asked me how things were going at TechCrunch. I told him I was exhausted after five years.'
Arrington avoided the typical robotic description of the strategic benefits of having a new corporate parent and opted for a more personal, less polished explanation of his decision:
The truth is I was tired. But I wasn't tired of writing or speaking at events. I was tired of our endless tech problems, our inability to find enough talented engineers who wanted to work, ultimately, on blog and CrunchBase software. And when we did find those engineers, as we so often did, how to keep them happy. Unlike most start-ups in Silicon Valley, the center of attention at TechCrunch is squarely on the writers. It's certainly not an engineering-driven company.
AOL, of course, fixes that problem perfectly. They run the largest blogging network in the world, and if we sold to them, we'd never have to worry about tech issues again. We could focus our engineering resources on higher-end things, and I, for one, could spend more of my day writing and a lot less time dealing with other stuff.
While he didn't get into the details of the earn-out he signed, he did make it clear that there was some form of retention bonus tied to future performance, which is another example of his admirable transparency:
I fully intend to stay with AOL for a very, very long time. And the entire team has big incentives to stay on board for at least three years.
Arrington was also careful not to gush about how wonderful AOL is, presumably in consideration of his audience, who may not have been thrilled with the idea of TechCrunch losing its independence. He made it clear he respects AOL, but also throws out the possibility that they might fail:
AOL has a very big vision for the future. They may succeed or they may fail, but at least they are all running in the same direction.
Telling your employees you've sold (or are planning to sell) your company is a difficult conversation, and I think Arrington provides a good example of how to do it with as much authenticity as possible. I, for one, have saved his letter so I can refer to it if I ever find myself back in the position of having to explain why I opted to sell.