Can Your Company Grow Without You?

The Gold Standard for Attracting Acquirers

If you took a six-month vacation, would your business continue to grow? If the answer is no, this could be a problem in making your company a target for acquisitions.

A strong founder or group ahead of the company is an essential asset for another company to be interested in a merger or acquisition. In many cases, it is the desire to bring in the founding team that justifies starting a conversation about joining forces between two companies.

But if there's one thing that's true more often than not, it's that the founding team should exit the business within a few years of an acquisition at most. In case of merger This might be a little different, but it's worth reading our thoughts on this to understand that in fact everything depends on the intention for the deal.

The Founder Dependency Problem

A business that depends on the founder to operate becomes a problem for the buyer from the beginning of the acquisition. To begin with, the news of the acquisition can already impact the team's morale when it is very dependent, generating insecurity.

Furthermore, this difficulty in replacing one or more irreplaceable founders can hinder negotiations and negatively impact your valuation. Remember what is being acquired is not the founding team (even in a acqui-hire, with some exceptions). What has intrinsic value is the business, the operation, the product. And the more dependent this business is on specific people, the greater the risk for the acquirer.

In other words, there is no doubt, excessive dependence on the founder is a problem. Not just from an M&A perspective. I already operated my first startup with an excessive dependence on myself and the result was an anxiety attack. The cost of your mental health cannot be measured in dollars.

Is it to stay away then?

How hands-off should I be then? That's probably the question that comes to mind when we discuss the problem of dependency.

Being expendable is good. Of course, the limit for this depends on the size of the company. While it is very small it is likely that you will be up to your neck in the execution. But as it grows, this is an important goal for you to give yourself. That doesn't mean you'll stay away. It means it shouldn't need you to operate.

There are exceptional founders who answer calls from consumers, participate in sales, and get their hands dirty in operation. But they do this so as not to lose connection with day-to-day and the reality of the company. Not because the company needs them in these roles.

If you manage to maintain ideal proximity, you will have the combination of strategic, tactical and operational vision to best contribute to the company's performance. It’s not about walking away and not wanting to know anything anymore.

In fact, if a potential buyer approaches and realizes that you don't know the company, you don't know the numbers off the top of your head, this could give a horrible impression and will certainly go against the deal. You can't be the only person to know these things, but you need to be one of them.

What about the founder mode?

I detailed my vision about founder mode in this article and she it's exactly about that ideal perspective. The founder is able to see the business as a machine, from the outside, at the same time as being able to intervene in it in a way that executives are unlikely to be able to do.

This intervention may include a good deal of digging in the mud and defining details. But it doesn't mean dependence. If it's the case it means you can go ahead and take control of the business to change direction, interfere with the roadmap and change details. That is, as long as, at the moment you stop doing this, the company continues to operate and grow, even if in a less optimized way.

How to Become Expendable

Some important tips for making yourself expendable for the company include:

Creating clear processes and effective delegation.

Establish basic playbooks for key activities and decision criteria that allow for real team autonomy. Delegation must evolve naturally from a closer connection to total independence, always with clear objectives and metrics.

Strengthen internal leadership

Strengthen internal leadership and have a modus operandi for the company (and not for the person). Develop a culture of ownership where leaders have real authority to make important decisions. Share your knowledge through mentoring and record critical learnings in practical, accessible formats. The focus must be on training successors who truly understand the business modus operandi.

Adopt technology and flows to automate routine decisions

Adopt technology and flows to automate routine decisions. Implement automations and tools that capture essential business logic, reducing the need for constant intervention in day-to-day decisions. Well-built dashboards and clear operating rules are more valuable than extensive processes. The goal is to have a business that runs smoothly even without your daily presence.

Create redundancy in strategic functions.

Create redundancy in strategic functions. Have at least two people who truly understand and can execute each critical area of ​​the business. This reduces risks and creates natural growth opportunities for the team, as well as allowing you to step away when necessary without compromising the operation.

Conclusion

Ultimately, the balance between founder presence and expendability is an art that needs to be cultivated. The goal is not to become absent or disconnected from the business, but rather to build a company that can operate autonomously and efficiently. A founder who achieves this balance not only creates a more valuable company to potential buyers, but also builds a more resilient and sustainable business in the long term.

Remember: being expendable does not mean being irrelevant. On the contrary, it means that you were successful in creating a robust organizational structure, with well-defined processes and a capable team. This allows you to focus on what really matters: the strategic vision and continuous growth of the company, while maintaining the flexibility necessary to intervene when necessary, without being an operational bottleneck.

The true test of a founder is not his ability to do it all, but his ability to build something bigger than himself.