Chris described that he regrets that when the sale of gravitytank was announced, he wasn’t more active in helping people process the change. Christian from T3 described that, during the acquisition, very few people knew about it; in fact, for a large part of the sales process, only Christian and his CEO had any idea that it was happening at all. Maria, Matthew, and the Coopers all also mentioned the veil of secrecy above the sale process.

This is an almost ubiquitous part of the process, and one of the most emotionally draining. Imagine that you’re going through the day-to-day activities of running your company—hiring, firing, problem solving, selling work, motivating teams—with a giant secret that will impact all aspects of your business! And it’s hard to keep a secret like this, because people who have worked closely with you for a long time will notice changes. When I was going through this process, I found myself wound up all the time, constantly churning in my head over all the open and incomplete parts of the process. That makes it extremely difficult to be present during meetings and conversations, and it also made me pretty snippy; I had less patience than normal for pretty basic activities.

Why keep the process secret?

There are several big reasons for holding the acquisition close to your chest.

First, you’ll likely be contractually obligated to keep it quiet through an NDA, and probably an NDA that’s much more constraining and punitive than a normal one you may sign in the course of business. Your team is already limited in what they can tell the world, but that doesn’t mean they’ll follow that responsibility, and I’ve found that designers are some of the worst gossips. A breach of this form of NDA may do more than just break the deal—you may find yourself facing damages as a result of a leak.

Additionally, secrecy is a form of risk management. There are many things that can tank a deal, including public scrutiny, unplanned attrition, and client turnover. Imagine that your clients have formed a close bond with you and your design team, and recognize the benefits of working with a small group that they trust. What will happen when you become part of a larger group? Will they lose the personalized attention they receive? Will your rates change? Will they have to work with new leaders, and re-establish a working cadence? Clients may decide that the risk isn’t worth it, and they may choose to move on or change their minds about future contract commitments. That’s a problem for your revenue planning, and that’s a problem for your valuation.

Secrecy also limits the anxiety within your team. Change can be scary, particularly change that might impact quality of life and compensation. They’ll have questions, but for a good part of the process, you won’t have answers to give them. That sort of ambiguity, on top of the already ambiguous nature of creative problem solving, can be really overwhelming, and in addition to the stress it will cause, it may directly lead to people leaving.

If you keep the process private, there’s an unfortunate reality you’ll have to face when the process becomes public: people will feel that they’ve been left out of something important (they have!) and didn’t get to voice their opinions (they haven’t!), and so it’s highly likely that you’ll lose trust from some of the team members. People who have been at your company for a long time will feel particularly disappointed and ignored, and people in leadership will start to question what being a leader at your company actually means, if they don’t get to help make big strategic decisions like this.

Ways to manage secrecy

Several of the people I spoke with described ways they handled this disappointment or feelings of being left out. Perhaps the most common is through providing financial incentives to stay. This form of retention bonus is typically offered to employees at the end of their first year post-acquisition, but might extend even further than that. And often, these bonuses can be extremely large, even approaching their entire yearly salary. We’ll talk more about the mechanics of retention agreements later, but suffice to say that the money can be a good incentive, but many creative people value other things even more than financial incentive. What about their role and impact? What about their autonomy? And what about the culture of the company? It’s hard to ensure that these won’t change, or will change for the better, particularly when you don’t actually know that’s true. No one I spoke with had a good solution for this problem, other than being honest and direct about intention.

Another way that founders managed the potential lack of trust as a result of secrecy was to open a decision-making inner circle slowly, but still prior to the acquisition. Sue and Alan Cooper broadened the set of people who knew about a potential acquisition before the deal was done. Sometimes, a buyer may actually ask for this, because they want to interview the extended leadership team. Often, this is because they are looking for a group who can manage the team if you, as an executive, were to leave.

Still another way to manage this was to abdicate a large portion of the deal to the next level of leadership, as Chris Conley explained. This certainly signals trust and a belief in the team’s ability to execute. Of course, it also means that the team may do things you don’t agree with. That’s a leap that many founders aren’t willing to take. This also signals to the buyer that you may not be fully investing in sticking around when the deal is over, which might not be your intention.