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One thing to remember is that the acquirer has probably done this before while the acquiree is a first-timer. The details are almost certainly going to favor the party with the most experience.

I once worked for a company that was acquired. At the first all-hands meeting after the acquisition closing, the CEO was practically gloating about how cheaply he was able to get us. All because he knew how to structure the deal in a way that wasn't transparent to our company owner.



Your company should have retained investment bankers. Just like you get a lawyer to represent you in court.


Probably not a company with any professional investors on board.


Correct. The founder probably retained 90% or more of the stock, its growth was completely organic. I was very lucky to be part of it.


If there is one way a small shareholder can ensure that they are going to be treated well it is to see to it that they hold the exact same kind of stock as a much larger shareholder. That way a bigger fish will fight for your rights with a lot more power than you ever could do by yourself. There are then still quite a few ways in which you could be screwed but far fewer than without that precaution.


Indeed. This is also why you should make sure any equity you get in the acquirer as part of the deal is as high up the preference stack as possible.




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