Max built a brand that was recognized as a top-tier agency; as he described it, the brand was beginning to play on equal footing as some of the more established consultancies. He felt that, after the acquisition, that brand disappeared. While he was certainly responsible for shaping the vision and tenor of the company, he recognized that his personal name was less important than the name of the company and the reputation that came with it. But that distinction wasn’t clear to Accenture (or, they didn’t care!) and so the brand Matter faded away.
Sue and Alan Cooper had a similar experience in losing the name of their company, and what that name signaled to the world, and it’s easy to imagine how difficult it must be when your name is literally connected to the brand. They noted that when the company was fully integrated, the Cooper website was taken down, which has consequences: pride of ownership aside, people who previously worked at Cooper suddenly had no real evidence of that part of their employment history!
I chatted with another founder who named her company as a portmanteau—a combination of her name and her partner’s name. The name didn’t go away, but they no longer had control over what it represented. And I spoke with another founder who described that the feeling he felt after his sale was “mourning”—that he considered his brand to have died, and his feelings were couched in sorrow. His co-founders had their old logo tattooed on their bodies to make sure they never forgot what they built.
It’s inevitable that your brand is going away, or going to change dramatically, at least in some respect. Hot Studio, gravitytank, T3, User Centric and Idean all evolved or disappeared, both in name and in their industry essence. Given the likelihood of this change, and the way the brand is connected to your heart and soul as a founder, there are a number of things to consider before selling.
It’s not easy to imagine the emotional impact of losing your brand, but it’s even harder to imagine the logistical impact. If you are like the founders I spoke with, you’ve likely integrated yourself into your company in ways that were helpful and healthy in early parts of your entrepreneurial journey, but become really problematic when you go to separate yourself.
At some point post-acquisition, your old email address will stop working. In some cases, it will be forwarded to an address at the new company, but in many cases, it simply disappears: when people email you, their email will get kicked back as undeliverable. Imagine being on the other end of that one; a client you haven’t spoken with in years is interested in working with you again, but when they send you an email, it bounces back. Is the company still in business? Did you get fired? They’ll never know, unless they take a proactive step to track you down.
Your email address is your login to sites. When you can’t remember your password, you get a “reset password” email with a link to click. What if you can’t click it because that address doesn’t exist anymore? Your email frequently acts as a form of two-factor authentication, with a six digit code sent to it to confirm you are who you say you are. What if you can’t get the code?
It’s inevitable that in the history of running your business, you’ve used your business email address for non-business activities. Before you sell your company, take the time to write down every site you visit that uses your business email address for personal activities—and then methodically change your email address to a personal account. If you use a password manager, this is a bit easier; if you don’t, it’s a time consuming and arduous process. But it’s worth it, because post-acquisition, you might get locked out of your 401(k) or bank account!
My “inbox” is really a catch-all for every email I’ve ever received, and it has tens of thousands of messages in it. Most are useless, but I search those emails daily to find context for an old conversation, remind myself who a contact might be, or to dig up poorly archived or organized attachments and documents. It’s a fundamental part of doing business, and when your email gets shut off, it’s gone.
My contacts list works the same way for me. Without the ability to auto-complete an email address or track down someone’s larger contact context, I’m lost. That, too, is gone when your email account gets shut off.
You can download your MBOX file, but it’s probably in violation of your sale agreement; same with your contacts list. So before you sell your company, think long and hard about how tools like email and your digital calendar support you in your work. If you’re committing to an earnout, your existing contacts and the things you’ve done for them in the past are critical to your success. Like everything else, if this isn’t figured out and negotiated prior to a sale, you’ll lose leverage—and therefore, urgency—in any sort of transition.
It’s likely that the web is the primary source of historic information for your digital company. You have social media posts, microsites, thought-leadership content, blog posts, Vimeo videos, case studies, and more. When you sign those materials over to a new owner, they can do anything they want with them, including remove them entirely. Sue and Alan Cooper described that their former employees have no place to point prospective employers, as the Cooper site redirects to Designit (with no reference to the former company at all). As of this writing, Idean forwards to frog, T3 forwards to Material Plus, Matter is a dead link, gravitytank forwards to Salesforce, and so-on. The Wayback Machine has been generous to the content of these sites, but embedded functionality typically doesn’t work properly, and while it acts as a nice archive, it’s not the same as the ability to point to a real, working web property.
Interestingly, these same companies—Idean, Cooper, and gravitytank—all still have Twitter accounts that are inactive, but maintain their previous posts. This may even be worse than a consistent takedown, as it can appear to be sloppy marketing, and may signal that the company still exists, but their web presence is simply not functioning properly.
Even worse than having your brand disappear is losing control of it. But when you go through an asset sale, you’re giving up the ability to control the way your creation is presented to the world. When the acquiring company wants to change—not simply remove—your brand messaging and style, they can. And if you remain emotionally tied to the way the brand looks, feels and sounds, you’re in for a difficult time when someone else claims creative control over it.
This might mean that content you’ve created, like blog posts, are attributed to someone else (it’s likely you assigned copyright to the new owner). It may mean that the details of the aesthetic, like color, type, and layout consistency, start to degrade from the webpage. And it might mean that things you don’t particularly value, like in-page advertising, may suddenly start to show up. What can also be trying is that, semantically, your name is still associated with those materials. For many of us, our company brand is built on our reputation for good design. If someone searches for you on Google, or sees a reference to something you’ve done, chances are it will link back to the site that you no longer control. And putting it lightly, that may not look like what you want.
You have some ability to minimize these issues, because you can negotiate to keep your brand in-tact. As we’ve seen, you have the most amount of leverage prior to signing an LOI, and while brand isn’t typically part of a letter of intent, it can be, because anything can be negotiated, depending on what you are willing to give in exchange. So, if you want to keep parts of your brand in place and under your control, that’s the time to do it. Here are the things you might push for:
One way to ensure that your brand lives on is simply not to sell it. You might negotiate that, while things like your contracts and staff transition to the buyer, the brand itself doesn’t. That’s tricky, though, and gets fairly existential quickly: what actually is a brand? If you feel that it’s a comprehensive representation of the company (including the brand, mark, website, social media, attitude, and so-on), that’s an awful lot to carve out of a sale. In an acqui-hire, that can probably be negotiated: Hot Studio is still alive with the same pre-sale brand aesthetic and ethos, perhaps because Facebook only wanted the talent. But if valuation is tied to revenue, and revenue is based on your ability to sell, the elements of the brand are a huge part of your business development story. You’ll give up valuation to retain that ownership.
You could negotiate that the brand, mark, website, social media, attitude, and so-on continue to exist and operate independently, similarly to how the owners at Idean argued for a clause for no operational changes for a period of time. While this certainly lets your message and approach live on, it challenges a key nature of a strategic acquisition. The buyer may be looking to leverage your company’s skills in a “better together” or “one stop shop” storyline to the market. It seems disjoint, then, to have two separate brands presented to customers in two separate ways. And as we saw with Idean, the independent operations only continued for a certain amount of time; the acquiring company had inertia towards integration, and after several years, the brand was absorbed.
If you have a strong thought-leadership presence, you might want to argue to retain copyright over the materials that have been generated. A compromise may be to grant a free and perpetual license for the acquirer to use those items, but for you to use them, too. A buyer may have the most appetite for a proposal like this, but they’ll view these items as intellectual property; again, giving up IP may mean giving up valuation.