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There is a very active startup scene in Canada, and those among the talented and passionate group of founders are probably thinking about their exit options.

According to a recent PwC survey, 78 per cent of Canadian startup CEOs are looking at some sort of exit strategy and nearly two-thirds hope to be acquired, a figure that's up significantly from 44 per in 2013. In fact, 40 per cent plan to leave the market in one to three years.

Now that the darkest days of the recession appear to be over, a lot of companies that squirreled away their pennies are flush with cash and they are ready to go on an acquisition spree to leapfrog over lost innovation opportunities. These companies are acquiring the agile and nimble startups that have deep talent, compelling intellectual property, and access to markets that would be too expensive to develop otherwise.

A few recent examples of global companies acquiring Canadian startups include Taleo – which had early roots in Canada and later sold to enterprise software colossus Oracle – and Kobo, which was acquired by Japanese e-commerce king Rakuten.

So what happens when it's your turn to be acquired? The founders are usually required to stick around for at least a year or two to assist in the integration (and for their shares to vest), which is often documented as difficult for both the acquired and the acquiring organizations. What isn't typically discussed is the personal transition that founders go through, requiring a mindset shift from being a freewheeling entrepreneur to being an odd cog that gets wedged into the existing corporate machinery – in other words, you're now an intrapreneur.

How do you make a smooth personal transition?


It's important to know yourself: your strengths, weaknesses, habits, behavioural triggers and values. You are no longer calling all of the shots, so you need to be able to play in the same sandbox with other people. Knowing yourself well will give you perspective into which battles you can win, which ones you should avoid, and which ones are deal breakers.

Don't forget to evaluate your team to find out what motivates them and what makes them special. The parent company must have seen something they liked, so make sure you protect that fiercely.

Take nothing for granted

You're the new kid in town so get familiar with your new environment before assuming anything. Learn how things get done in the parent company and understand what you need to do to get attention, funding and resources for your projects.

Find allies

An acquisition requires the buy-in of some pretty powerful people at the parent company, so you're sure to have some great allies in the executive echelons. Seek them out, understand why they backed the purchase of your startup, and find out how you can help fulfill their expectations.

Cultivate a successor

Don't leave without having someone to take your place. An acquisition can still fail many years in if there is no one to lead the team and draw the attention and resources they require to do their jobs. This is where the introspection piece comes into play again – acknowledge that the best successor is not likely to be your clone. The team likely needs someone with a different set of skills to lead it through the next phase of success.

Ferhan Bulca (PhD, P.Eng) is a seasoned intrapreneur, delivering multimillion-dollar projects that opened up new markets for companies in medical devices, aerospace, software and manufacturing. He's a consultant for life sciences corporations and he also leads the commercialization efforts of medical technology startups at Innovation Factory and MaRS. Follow him @FerhanBulca

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