I’ve been involved in three acquisitions in my life — varying from tens of millions of dollars down to, well, not tens of millions of dollars. I’ve learned many things from those experiences, but chiefly this: after your company is sold, you don’t own it any more.
Sounds obvious doesn’t it, like when you sell a car, or a house, or a banana. And yet it’s remarkable how many founders delude themselves, either because they believe the bullshit told to them during negotiations, or because they’re fucking stupid, that they will still somehow be able to control the destiny of their baby after they’ve sold it to a new family. And now, to paraphrase Family Guy, look what happened to them. It’s why we have wrong-sounding TechCrunch.
Again, my experience is with valuations stretching “only” into the tens of millions. When it comes to multi-billion dollar acquisitions, especially those involving giant public corporations, you would have to be out of your fucking mind to make promises about what will happen to your company post-acquisition.
Writing on Reddit yesterday, Oculus founder Palmer Luckey made a promise about what will happen to his company now that it’s owned by Facebook. In response to a Redditor’s demand that he “[j]ust promise me there will be no specific Facebook tech tie-ins,” Luckey replied, “I promise.”
For good measure, Luckey gave some insight into why he sold the company to Facebook.
“Why would we want to sell to someone like MS or Apple? So they can tear the company apart and use the pieces to build out their own vision of virtual reality, one that fits whatever current strategy they have? Not a chance.”
From this we learn three things about Luckey. One: That he’s out of his fucking mind. Two: That it apparently didn’t occur to him that he didn’t have to sell the company to Microsoft or Apple or Facebook or anyone. He could have just kept it. And, three: That he’s unable to even muster a white lie about how great a company Facebook is, or how this is a perfect fit for Oculus. Instead his best justification is that Facebook is the lesser of three evils. Well, super.
If (or more likely when) Luckey’s promise is ultimately broken, it will be the second time this month he’s gone back on his word. Speaking to Games Industry International just three weeks prior to announcing the Facebook sale – the negotiation of which we’ve been told took just five days – he said:
We want to do things our way. There are certainly people who are interested… but we have a vision for our consumer product and we know that we’re going to be able to pull it off. We don’t want to be assimilated into someone who’s going to have us working on their own product or their own vision of VR – we want to be able to deliver our own vision of what VR is.
And yet, here we are.
So, as we all wait for the inevitable movie-style smash-cut to the launch of FacebookFace VR, let’s at least use this moment as an excuse to remind other founders who might delude themselves otherwise: once you sell your company – to Facebook or anyone else – you can no longer make promises as to what it will or will not do.
Here though are the things you can do: Buy something nice with your new money, make friends with your new workmates, spend an hour or two arranging the ornaments on your cool new desk and, of course, do your best to ensure the spirit of your creation lives on within its new home.
And if you should find yourself feeling any seller’s remorse, just remember: you may not be the boss any more but, things could always be worse. You could have sold to AOL.