Go to the Globe and Mail homepage

Jump to main navigationJump to main content


What to do before you sell a company Add to ...

It's not uncommon for entrepreneurs to become employees when they sell their company. Elaine Fischer and Stewart Thornhill offer a few tips on what to do before the sale to ensure a happier union.

Common reasons employment agreements break down:

  • Not setting a defined time period for the relationship.
  • Lack of clarity on who is in charge.
  • Difficulty transitioning from role of entrepreneur to role of employee.
  • The new owner no longer needs the entrepreneur’s guiding voice.
  • Inability to work within new workplace culture.
  • Difficulty watching someone else make decisions about ‘your’ business or product.

What to consider before a sale:

More related to this story

  • Be clear why you want to stay on. Know your own motives before going any further.
  • Consider alternatives: Consultancy could be better, or selling cold and walking away.
  • If joining the new team, apply a specific period of time to the new working relationship, subject to renewal. Whether it’s six months or three years, it will help clarify the new structure and reduce ambiguities for other employees.
  • Have a frank discussion with the buyer, going through scenarios for possible conflict. Assess whether you can work together.
  • Research the acquirer’s work culture: Speak to former employees, other companies that have been acquired, and clients, to get a feel for the new work environment.

Sources: Stewart Thornhill is the executive director of the Pierre L. Morrissette Institute for Entrepreneurship at the Richard Ivey School of Business , and Elaine Fischer is the Anne and Max Tanenbaum chair in entrepreneurship at the Schulich School of Business.

Special to The Globe and Mail

Globe Investor - GIT Upsells
It's never been a better time to get Globe Unlimited
Try Globe Unlimited, featuring new Globe Investor Tools, for a special trial rate. Only 99¢ for your first month.

Are you a Globe Investor Gold subscriber?
You qualify for complimentary access to Globe Unlimited.
Visit: globeandmail.com/globeplusunlimited
Try it today

In the know

Most popular video »


More from The Globe and Mail

Most Popular Stories