Elon vs Elon: Who Will Win?

The unfolding Twitter drama has many lessons for all of us

Ok, I am a stickler for integrity and following through on one’s commitments, verbal or written. You can call me old fashioned or naive, but I hope honesty never goes out of fashion. So I couldn’t hold my tongue any longer and penned my first Op-ed, which went from submission to publication by MarketWatch in less than 1 hour this morning. Check it out here and let me know whether you agree/disagree on your favorite social channel!

As a bonus, here are some additional observations on this whole Twitter acquisition saga and the lessons it has for every entrepreneur considering M&A as their Exit Path (😉):

An acquisition is never done until it is done and the deal has closed. As the unfolding courtroom drama around the Twitter acquisition has already shown, there are many reasons even the most passionate buyers can get cold feet and walk away from a deal, including external market conditions, what they uncover during the diligence phase, the buyer's ability to have the funds to close the deal, the psychology of buyer's remorse, or perhaps a combination of the above. And that is for acquiring a public company, which typically have a far higher closure rate than private company acquisitions because so much has already been disclosed by public companies upon which buyers make their decisions. 

And when buyers back out, you have to deal with the fallout, which can entail massive distraction and loss of productivity for the entire company, hurt morale and loss of critical talent, loss of key strategic partners who are uncertain about the strategic direction of your startup, as well as lawsuits from various parties who may assume that you would rather settle than have to deal with a lawsuit on top of everything else going on. 

To avoid those problems, here are my recommendations:

1. Don’t enter into M&A talks casually, so that you don't invite acquisition offers before you are ready.

2. Constantly create strategic options, so that if when you do enter into acquisition discussions, you can have the most leverage and not be beholden to one single strategic outcome.

3. Don’t hide any balls. Make sure a potential acquirer has the material information to base their offer on and avoid surprises as much as possible.

4. Create leadership capacity because an acquisition takes much time and bandwidth away from your leadership.

5. Maintain confidentiality of the process as much as possible to mitigate against the fallout if a deal does not get consummated.

Until next time,

Touraj